In a large bowl, dissolve yeast in warm water. Add the milk, butter, egg, sugar, salt and 2 cups flour. Beat on medium speed for 2 minutes. Stir in enough remaining flour to form a soft dough.
Turn onto a floured surface; knead until smooth and elastic, about 6-8 minutes. Place in a greased bowl, turning once to grease top. Cover and let rise in a warm place until doubled, about 1 hour.
Punch dough down. Turn onto a floured surface; roll into a 20x8-in. rectangle. Cut in half lengthwise, forming two 20x4-in. rectangles.
In a small bowl, combine the onion, butter, poppy seeds and salt. Spread over dough to within 1/2 in. of edges. Fold rectangles in half lengthwise; pinch seams to seal, forming two ropes. Place ropes, side by side, on a greased baking sheet; twist together and shape into a ring. Pinch ends together. Cover and let rise in a warm place until doubled, about 30 minutes.
Brush with egg. Sprinkle with additional poppy seeds. Bake at 350° for 40-45 minutes or until golden brown. Remove from pan to a wire rack to cool.