Preheat your oven to 350°F (175°C) and grease two 8.5 x 4.5-inch loaf pans.
In a microwave-safe bowl, melt 1 cup of diced apples with 1 tablespoon of butter for 30-60 seconds until softened. Mix with 1 tablespoon of brown sugar and 1 teaspoon of cinnamon, then set aside.
In a separate bowl, combine milk and apple cider vinegar and let sit for a few minutes.
In a large bowl, whisk together flour, 1 teaspoon of cinnamon, baking soda, and salt.
Cream together the remaining butter, light brown sugar, and granulated sugar until fluffy. Add applesauce, egg, and vanilla; mix until combined.
Gradually add the dry ingredients to the wet mixture, alternating with the milk mixture. Mix until just combined.
Fold in the remaining diced apples gently.
Pour the batter into prepared pans, swirling in the reserved apple mixture. Sprinkle with demerara sugar if desired.
Bake for 50-60 minutes or until a toothpick inserted into the center comes out clean.
Cool in pans for a few minutes before transferring to a wire rack to cool completely.
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Notes
Enjoy your Apple Cinnamon Bread warm or at room temperature!