In large bowl, combine 2 cups flour, sugar, undissolved yeast and salt. Heat water, milk and 5 T. butter until very warm (120-130°); stir into flour mixture. Stir in eggs and enough remaining flour to make soft dough. Knead on lightly floured surface until smooth and elastic, about 6-8 minutes. Cover and let rest on floured surface for 10 minutes.
Divide dough into 32 pieces; roll into balls. Melt remaining 3 T. butter; dip balls of dough in melted butter. Layer ½ cup honey and ½ cup walnuts and 16 dough balls in bottom of greased 10 inch tube pan with non-removable bottom. Repeat layers one time, topping with remaining honey and walnuts. Cover and let rise in warm, draft-free place until doubled in size, about 30- 40 minutes.
Bake at 375° for 35 minutes or until done; covering with aluminum foil during the last 10 minutes to prevent excess browning. Let cool in pan on rack for 10 minutes. Invert onto serving plate.