Step 1: Heat butter and oil in a 10-inch cast iron skillet over medium heat until butter melts and foaming subsides. Add pepperoni and cook, stirring, until pepperoni begins to crisp, about 2 minutes. Add pepper flakes and garlic and cook, stirring, until fragrant, about 1 minute. Add parsley and chives and stir to combine. Transfer mixture to a large bowl and stir in 1/2 cup Parmesan cheese. Do not wipe out skillet.
Step 2: On a lightly floured surface, divide dough into two even pieces. Working one piece at a time, roll or stretch into an oblong about 8 inches long and 4 inches wide. With a bench scraper or knife, cut crosswise into 12 strips. Repeat with other half of dough.
Step 3: Tie each strip into a knot and transfer to bowl with pepperoni/garlic mixture. Toss and fold with your hands until every knot is thoroughly coated in mixture. Transfer the knots to the skillet in a single layer. Drizzle with more olive oil, cover tightly with plastic, and set aside until doubled in size, about 4 hours. Alternatively, refrigerate until doubled in size, 12 to 16 hours.
Step 4: When ready to bake, preheat oven to 425°F and adjust oven rack to center position. Unwrap garlic knots. Sprinkle with remaining 1/4 cup Parmesan cheese. Transfer to oven and bake until golden brown and crisp, 25 to 30 minutes.
Step 5: Remove from oven and immediately brush with more extra-virgin olive oil and sprinkle lightly with more Parmesan.
Step 6: Serve right away with warmed sauce on the side.
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