This is an invaluable bit of kitchen wisdom imparted to me by the late Carl Sontheimer of the original Cuisinart food processor. He once told me that adding powdered milk to mixtures such as marzipan results in a more velvety smoothness. I've since noticed the presence of dry milk on the labels of many ingredients. And recently I tried adding it to yogurt to see if it would soften the intensity of the lactic acid. I was amazed how just a small amount of the dry milk powder made the yogurt creamier and deliciously mellow.
One of the important uses of dry milk I value the most is its addition to bread dough. I've experimented with "instant" dry milk and King Arthur's "Baker's Special Dry Milk. Their dry milk not only adds a smoother and more mellow flavor, it also results in a more tender texture and a significantly higher rise. Unlike "instant" dry milk, which is intended to be reconstituted and processed at low heat, the "Baker's Special Dry Milk" is heated during production to a high enough temperature to deactivate the enzyme protease, which impairs yeast production and, what is most critical, gluten formation and structure. This variety of dry milk will not reconstitute in liquid so it must be added to the flour. The high heat process also produces an exceptionally fine powder, which disperses uniformly through the dry ingredients. Because the particles are so much finer than the more crystalline ones of "instant dry milk," they pack down when measuring in a cup so if replacing "Baker's Special Dry Milk" with "instant" dry milk by volume you will need double the amount to arrive at the same weight. To substitute it for regular milk in recipes, use 1/4 cup of "Baker's Special Dry Milk" or 1/2 cup "instant" dry milk (1.4 ounces/40 grams) plus 1 cup/8.3 ml/8.3 ounces/237 grams of water per cup of milk. Up to 8.2 percent of the weight of the flour is the recommended amount; I use 6 percent in my soft white sandwich loaves.