Preheat and prepare. Preheat your air fryer to 375°F (190°C) for 5 minutes. Line a baking sheet with parchment and set aside. Fit a large piping bag with a star tip (a 1/2-inch wide open star tip works best).
Make the dough base. In a medium saucepan, combine 1 cup water, 8 tablespoons (1/2 cup) unsalted butter, 1 tablespoon sugar, and 1/2 teaspoon kosher salt. Bring to a gentle boil over medium heat, stirring to melt the butter.
Add the flour. Remove the pan from heat and quickly stir in 1 cup all-purpose flour all at once. Return to medium heat and stir vigorously with a wooden spoon for 1–2 minutes, until the dough forms a smooth ball and leaves a thin film on the bottom of the pan.
Cool slightly. Transfer the dough to a mixing bowl and spread it a bit to release steam. Let it cool for 3–5 minutes until warm but not hot to the touch. This prevents scrambling the eggs.
Beat in the eggs. Add 3 large eggs, one at a time, beating well after each addition. The dough may look separated at first—keep mixing until it becomes smooth, shiny, and pipeable. You want a thick, glossy batter that slowly falls from the spoon.
Fill the piping bag. Spoon the dough into the piping bag. If you don’t have a bag, use a large zip-top bag with a 1/2-inch star tip fitted in a corner.
Pipe the churros. Lightly spray a piece of parchment with oil. Pipe 4–6-inch strips of dough, using scissors or a knife to cut the ends cleanly. Leave a little space between each strip.
Air fry in batches. Lightly spray the air fryer basket with oil and place churro strips in a single layer, not touching. Mist the tops with a little oil. Air fry at 375°F (190°C) for 8–10 minutes, or until puffed and deep golden. Rotate or shake the basket halfway for even browning.
Make the cinnamon sugar. While the churros cook, combine 1/2 cup granulated sugar with 1–1/2 teaspoons ground cinnamon in a shallow dish.
Toss in cinnamon sugar. Transfer hot churros to the cinnamon sugar and toss to coat. The heat helps the sugar stick. Repeat with remaining batches.
Make the chocolate sauce. Place 4 ounces chopped semisweet or dark chocolate in a heatproof bowl. Heat 1/2 cup heavy cream until steaming (microwave or stovetop), then pour over the chocolate. Let sit 1 minute, add a pinch of salt and 1/2 teaspoon vanilla, and whisk until smooth and glossy.
Serve. Plate the warm churros with a bowl of chocolate sauce for dipping. Enjoy immediately for the best texture.