In a saucepan whisk together the water, 1/4 cup of milk, and 2 Tablespoons of flour. Cook and stir over medium heat until it is the consistency of paste. Remove from heat and cool 10 minutes.

Meanwhile, in a large bowl stir together 1 1/4 cups flour and the yeast. Set aside.

In a medium saucepan combine the remaining milk, honey, butter, and salt. Cook and stir over medium heat until warm and butter is melted. Remove from heat and stir in the cooled flour paste. Add in one egg and mix well.

Pour the milk mixture into the bowl with the flour and the yeast. Mix well. Add in as much of the remaining flour as possible.

Turn the dough onto a lightly floured surface. Knead in additional flour as needed to make a smooth, elastic dough. Place in a greased bowl, turning to coat the entire ball of dough. Cover and let rise until nearly doubled, about 1 hour.

Punch the dough down. Grease an 8 x 8 baking pan or a 9 inch round cake pan. Shape the dough into 10 equal balls. Arrange in the prepared baking dish. Cover and let rise 1 hour or until nearly doubled.

Preheat the oven to 350 degrees.

In a small bowl whisk 1 tablespoon of water with the remaining egg. Brush over the tops of the rolls along with a sprinkle of salt if desired. Sprinkle with the oats.

Bake for 25 minutes or until golden brown. Remove from oven and cool.