Heat milk on medium-low temperature in a heavy-bottom pan to 180°. (If you don't have a heavy-bottom pan, heat over low temperature to avoid burning your milk.)
Remove from heat and let it cool to 130°.
Meanwhile soak gelatin in cold water, let is sit for a few minutes. Then add to 130° milk.
Mix sugar and yogurt starter, and add to milk.
Add vanilla. Stir until it is smooth.
Place mixture in sterile pint or quart-sized jars. Place lids on top, but do not tighten.
Place in a warm area, undisturbed, for 8 - 12 hours.
Screw on the lids and chill.
To begin the process again, save a small jar of yogurt for your next starter.