Combine hot water and dry milk powder in a large saucepan. Stir well until the dry milk is completely dissolved.

Heat the milk over medium-low heat until it begins to boil, reaching a temperature between 180 to 185F. Use a thermometer if necessary.

Remove the milk from heat and allow it to cool to a temperature between 110 to 115F. Use a thermometer if necessary.

Add yogurt, sugar, and vanilla extract to the cooled milk. Stir well to combine.

Transfer the yogurt mixture to a clean glass pot.

Cover the pot with plastic wrap and a thick blanket.

Place the covered pot outside overnight or for 10-12 hours, if the weather is suitable. Alternatively, use the oven method.

For the oven method, preheat the oven to 110-115F and then turn it off, but turn on the oven light.

Place the yogurt mixture in the oven on the upper rack, close the door, and leave it there with the oven light on for 4-6 hours.

Once the yogurt is done, refrigerate it for 3-5 hours for best results.

Serve and enjoy.