Using a stand mixer fitted with paddle attachment, add 1 3/4 cups flour, yeast, sugar, anise seed and salt to mixer bowl; mix well, set aside. In saucepan, heat milk, water and butter until warm (120°-130°F, butter does not need to melt). Add to flour mixture. Add vanilla and eggs. Blend at low speed until moistened; beat 3 minutes at medium speed. Switch to dough hook. On low speed, gradually mix in raisins, nuts, candied fruit and enough of the remaining flour to make a soft dough. Knead 5 to 8 minutes until dough passes the window pane test. Place in greased bowl, turning to grease top. Cover; let rise in warm place until doubled in size.For hand mixing: following above steps, mix ingredients in large mixing bowl using a wooden spoon or dough whisk. Knead on floured surface.
Punch down dough. Divide into 2 equal pieces. On a lightly floured surface, shape each half into a round loaf. Place on greased large cookie sheet. Cover; let rise in warm place until indentation remains after lightly touching.
Egg wash: Whisk egg and water together. Brush on risen loaves.
Preheat oven to 375°F.
Bake for 30-35 minutes until golden brown. Remove from cookie sheet; cool on wire rack.