Combine water, milk, vegetable oil, yeast, salt, sugar, cinnamon, and half of the flour in a mixer bowl. Mix well with a dough hook attachment.
Gradually add remaining flour until dough is slightly sticky but not sticking to fingers.
Knead dough for 3-4 minutes, then mix in raisins.
Place dough in a lightly greased bowl, cover with saran wrap, and let rise for 1 hour.
Remove dough, knead a few times, form into a ball, and cut into 8 pieces.
Roll each piece into a strip and cut into 6-8 pieces.
Prepare a baking soda bath by boiling water and slowly adding ½ cup baking soda.
Place each pretzel piece in the bath for 30 seconds, then transfer to a parchment-lined baking sheet. Brush each piece with melted butter.
Bake at 400°F for 10-12 minutes.
Make a dipping sauce with 1 cup powdered sugar, 1 teaspoon vanilla extract, and 2-3 tablespoon milk.
Serve warm and enjoy!