Melt butter in microwave in a glass measuring cup. Add milk to hot butter; set aside mixture to cool until temperature is only slightly warm.
Dissolve yeast in warm water (100˚ to 110˚F) in the bowl of a heavy duty mixer. Stir in 1 tablespoon of sugar and let stand 5 to 10 minutes. (If mixture doubles the yeast is active.)
Combine 1 cup of bread flour with remaining 1 Tablespoon sugar and salt. Add to yeast mixture and along with the cooled milk and butter mixture. Blend at low to medium speed with paddle blade until well blended (about 5 minutes.)
Add remaining 1½ cups flour to make a soft elastic dough.
Using a rubber spatula scrape dough away from sides of bowl, forming dough into a rounded disc at the bottom of the mixing bowl.
Cover bowl and let dough rise in a warm place (80˚to 85˚F) until doubled.
Place walnuts in a small sauté pan over medium heat and stir toast until lightly browned and aromatic. Set aside to cool.
Turn dough out on a lightly floured surface. Add cranberries and walnuts and knead until evenly distributed. Shape dough into a 7-inch circle and place on a lightly buttered 12-inch pizza pan or baking sheet.
Make a slash in the top of the loaf. Cover with plastic and allow to rise until doubled in size (about 45 to 50 minutes.)
Preheat oven to 350˚F. Bake until well-browned, about 30 minutes.