To make the churro dough: Combine 1 cup of water with the butter or margarine and the salt in a saucepan and bring to a boil over high heat. Using a wooden spoon, stir in flour. Reduce the heat to low and stir vigorously until the mixture forms a ball, about 1 minute. Remove the dough from the heat and, while stirring constantly, gradually beat the eggs into the dough.
Heat about 2 inches of oil in a heavy, high-sided pot over medium-high heat.
Meanwhile, spoon the churro dough into a pastry bag fitted with a large tip. Squeeze a strip of dough into the hot oil. Fry the churros, turning them once, until golden brown, about 2 minutes per side. Transfer the cooked churros to a plate lined with paper towels to drain.
When the churros are just cool enough to handle, roll them in the sugar