Wash the dals till the water runs clear and soak overnight or at least 6 hours.
Rinse and drain and grind into a smooth paste. Do not use too much water.
Add salt, hing, sugar, and water till you get thick pouring consistency, not too watery. Adding sugar is optional, it's not enough to make it sweet, sugar caramelizes and gives the dosas a nice, golden color.
Heat a pan/tawa and spread the batter on the pan, starting from the center.
Rub butter on the dosa surface, and sprinkle onion, capsicum, masala, and coriander leaves on top of the dosa.
Fold it when brown and crisp on one side, no need to cook the other side.
Serve dosa with coconut chutney and sambar.