Add the butter to a light-coloured frying pan or skillet and melt over low heat.
If using powdered milk, add it as soon as the butter is all melted. The powdered will immediately want to stick to the bottom of the pan and start to burn, so stir constantly while adding it.
Increase the heat to medium or medium-low, and keep stirring as the butter cooks. It will bubble, crackle, and foam as the water evaporates out. As soon as you see brown specks and it smells nutty and very buttery, take the pan off the heat. Once the butter starts browning it could burn quickly, so it's important to keep a close eye on it the entire time.
Carefully pour the browned butter into a heatproof bowl or other heatproof container to stop it from cooking further.