If your cubed steak is more than ½” thick, you’ll want to pound it out until thin. This will provide additional tenderizing as well as allowing for more even cooking.
Season cubed steaks lightly with salt and pepper.
On a plate, place ½ cup flour - set aside. In a shallow bowl, mix remaining ½ cup flour, saltine cracker crumbs, seasoned salt, garlic powder and cayenne pepper.
In another shallow bowl, whisk together eggs and ⅓ cup milk.
Dredge cubed steak in flour, then dip in egg mixture and then finally coat with saltine cracker mixture.
Continue the same procedure for the rest of the steaks and place them on a large baking sheet.
Heat about ½-inch vegetable or shortening in a large pan (preferably cast iron) over medium heat. Note: I prefer shortening for these but use the oil you prefer.
Cook steak in 2 batches for about 5 minutes per side. Continue with the rest of the steaks.
Remove steaks to a paper towel-lined baking sheet to drain excess oil.
For the sawmill gravy:
Once steaks are finished cooking, remove excess oil from pan (leaving about ¼ cup remaining). Add ¼ cup flour to pan.
Whisk and cook over medium heat for 1 minute.
Gradually whisk in milk and cook until thick.
Whisk constantly and season to taste with salt and freshly ground black pepper.
Pour gravy over steaks.
Depending on where you live, this cut of meat is called cube or cubed steak. It is usually a round steak that has been run through a mechanical meat tenderizer and you'll see tiny little holes punched in it (see my image below.)
Sometimes, even after it is tenderized, it is still thick. If that is the case, you are going to want to pound it down until it is thinner so that it cooks quickly and evenly.
I really prefer to use shortening to fry these - it really deepens the flavor - but regular peanut or vegetable oil works fine too.
Salt and pepper are key. It sounds silly but to really get a super tasty white gravy, you need to season it really well. So add a little, then taste. Add a bit more, then taste. Keep doing this until it is just right and not bland.