Dissolve yeast in warm water in a small bowl; set aside.
Combine milk, the 1/4 cup butter or margarine, the sugar, and salt in a medium saucepan. Heat and stir until just warm (115 degrees F to 120 degrees F) and butter or margarine almost melts.
Combine yeast mixture, warmed milk mixture, and egg in a large bowl. Using a wooden spoon, stir in as much of the flour as you can.
Turn the dough out onto a lightly floured surface. Knead in enough of the remaining flour to make a moderately soft dough that is smooth and elastic. This will take 3 to 5 minutes. Shape dough into a ball. Place in a lightly greased bowl, turning once to grease entire surface of the dough. Cover; let rise in a warm place about 1-1/2 hours or until double.
Punch dough down. Turn dough out onto a lightly floured surface. Divide in half. Cover; let rest 10 minutes. Roll each half of dough until 1/4 inch thick. Using a floured 2-1/2-inch biscuit cutter, cut into rounds. Brush with the 3 tablespoons melted butter.
To shape rolls, use a wooden spoon handle to make a slightly off-center crease in each round. Fold the larger portion of each roll over the smaller portion, overlapping slightly; press folded edge firmly. Place rolls 3 inches apart on greased baking sheets. Cover; let rise about 30 minutes or until nearly doubled.
Bake in a 375 degree F oven for 12 to 15 minutes or until golden. Immediately remove rolls from baking sheets. Serve warm. Makes about 18 rolls.
Before proofing shaped rolls, loosely cover with plastic wrap, leaving room for rolls to rise. Chill for at least 2 hours or up to 24 hours. Uncover; let stand at room temperature for 30 minutes. Bake and serve as directed above.