[8] By the mid-2000s, James Dewitt Yancey, better known as Jay Dee and later J Dilla, achieved recognition in the music industry,[9][10][11] with popular contemporary producers such as Pharrell Williams and Kanye West acknowledging his influence and talent.

[12][13] Despite not achieving mainstream success,[14] he worked with numerous artists throughout his career,[15] including the Pharcyde, A Tribe Called Quest, the Roots, Common, Erykah Badu, and D'Angelo.

[16] J Dilla's health started declining after a tour in January 2002,[21] when he had been diagnosed with thrombotic thrombocytopenic purpura (TTP), a rare and incurable blood disease.

[12] Throughout the years, Dilla shared his latest work with friends and colleagues using short demo records, called "beat tapes".

He played one of them, titled Donuts, to Madlib and Peanut Butter Wolf, the founder of Stones Throw, who then shared it with other members of the label.

All of them loved it, but Eothen "Egon" Alapatt, Stones Throw's general manager, did not want to release it, since he thought Dilla should instead work on a sequel to Champion Sound.

Peanut Butter Wolf convinced him that they should release an instrumental album, as Dilla was unable to record vocals due to his deteriorating condition.

[29] His mother, Maureen Yancey, had requested Dilla's MPC, Moog keyboard, a turntable, a laptop, an audio interface, and a crate of records to his hotel room.

According to Kelley L. Carter of Detroit Free Press, Dilla told his doctor he was proud of the work, and that all he wanted to do was to finish the album.

According to his 2022 book, written based on nearly 200 interviews he conducted, the album began as a beat tape made by J Dilla but was largely finished by Stones Throw's art director Jeff Jank.

[12] Citing people close to Dilla, Charnas asserted that the original version of Donuts was not recorded in the hospital, but rather at home, using Pro Tools audio editing software.

[22] The author concluded that while publications created the "dramatic creation story" of Donuts, based on the reports of J Dilla's condition and equipment being placed in his hospital room, Stones Throw, who at the time faced financial difficulties, chose not to refute it, as it increased popularity of the record and consequently its sales.

[33] When Peanut Butter Wolf refused to ask weakened Dilla for any new material, Jeff Jank came up with an idea to release an extended version of the Donuts beat tape, which originally consisted of 27 tracks and was shorter than 30 minutes.

He started with minor adjustments, but gradually progressed to larger edits: the first one, which he used to find out what Dilla thought of his work, was combining two tracks into one, titled "Workinonit".

[40] In his last interview, which was granted to Scratch Magazine in November 2005, Dilla briefly spoke about the creation of the album: It's just a compilation of the stuff I thought was a little too much for the MCs.

[42][35] According to Collin Robinson of Stereogum, "it's almost too perfect a metaphor for Dilla's otherworldly ability to flip the utter shit out of anything he sampled".

Apart from seven 7-inch vinyl records it contained a bonus 7-inch with tracks "Signs" and "Sniper Elite & Murder Goons", featuring MF Doom and Ghostface Killah.

[59] Will Dukes of Pitchfork wrote that Donuts showcases Dilla paying homage to "the selfsame sounds he's modernized", and in that sense, the album "is pure postmodern art—which was hip-hop's aim in the first place.

"[64] PopMatters' Michael Frauenhofer described Donuts as an "album of explosions and restraint, of precisely crafted balances and absurd breakdowns, of the senselessly affecting juxtaposition of the most powerful of dreams.

[37] Giving it a three-star honorable mention rating in his review for MSN Music, Robert Christgau called Donuts "more about moments than flow, which is strange when you think about it".

[68] In a 2007 guest column for Pitchfork, Panda Bear of Animal Collective stated that Donuts was "By far the album I've listened to most over the past year, and I feel like almost any of the songs off there I could say is my favorite.