Cut the circle. Use a 2–2.5 inch round cutter, drinking glass, or jar lid to punch a circle out of the center of the bread. Save the cutout.
Heat the pan. Set a nonstick or well-seasoned skillet over medium heat.
Add the butter and let it melt and foam slightly without browning too much.
Toast the bread. Place the bread slice and the cutout in the pan. Cook for 30–60 seconds to lightly toast one side.
Flip and add the egg. Flip both pieces. Crack the egg into the hole.
If the white tries to escape under the bread, press the bread down gently with a spatula for a few seconds.
Season. Sprinkle salt and pepper over the egg. If using cheese, add a light pinch around the edges so it melts into the bread.
Cook to your preferred doneness. For a runny yolk, cook 2–3 minutes. For a medium yolk, cover the pan for the last minute.
For a firm yolk, cook 3–4 minutes total and flip for 20–30 seconds at the end.
Toast the cutout. Flip the circle cutout as needed to brown both sides. It should be crisp and buttery.
Finish and serve. Slide the bread and egg onto a plate. Top with herbs, chili flakes, or a few drops of hot sauce if you like.
Serve the cutout on the side for dipping into the yolk.