Place water, sugar, salt, flour, and yeast in the bread machine pan in the order recommended by the manufacturer. Select Dough setting.
When the cycle is complete, let dough rest on a lightly floured surface. Cut dough into 8 equal pieces, and roll each piece into a small ball. Flatten balls, and poke a hole in the middle of each with your thumb. Twirl the dough on your finger to enlarge the hole, and to even out the dough around the hole. Cover bagels with a clean cloth, and let rest for 10 minutes.
Preheat oven to 375 degrees F (190 degrees C). Grease a baking sheet.
Bring 3 quarts of water to a boil in a large pot. Stir in 3 tablespoons of sugar. Carefully transfer bagels to boiling water. Boil for 1 minute, turning halfway through. Drain briefly on a clean towel. Arrange boiled bagels on the baking sheet.
Bake in preheated oven for 20 to 25 minutes, until well browned.