In a medium saucepan, combine the piloncillo and 1 cup of the water. Cook over medium-high heat, stirring often, until the piloncillo melts into a smooth liquid caramel.

Add the remaining 2 1/2 cups water, the cinnamon stick, anise seed, orange peel, and guavas if using. Bring the mixture to a boil for about 6 minutes, then lower the heat and simmer for about 4 minutes more.

Keep it warm while you make the dough.

In a large bowl, whisk together the flour, baking powder, sugar, and salt.

Make a well in the center, add the egg, melted butter, and vanilla. Mix until the dough looks like coarse meal.

Add the warm water one tablespoon at a time while kneading until the dough feels soft and smooth.

Cover the dough and let it rest for 30 minutes.

Divide it into 12 balls. Roll each ball into a very thin round, about 6 to 7 inches wide.

Let the rounds dry on parchment for 5 to 10 minutes, then fry one buñuelo at a time for just a few seconds per side until golden and crisp.

Drain on paper towels, then sprinkle with cinnamon sugar.

Serve the buñuelos warm or at room temperature with the piloncillo syrup on top or on the side.

Store leftovers in an airtight container at room temperature for up to 2 days.