Dairy bread was prohibited for consumption by a Rabbinic injunction enacted over 2000 years ago. The Rabbis feared that since most bread is parve, a person might mistakenly eat dairy bread with meat products without realizing the dairy status of the bread. (Meat bread is also restricted because it may accidentally be consumed with dairy items.)
There are two exceptions to this rule:
Dairy bread that has a unique shape is permissible because the shape will serve as a reminder that the bread is not parve. One may bake a small portion of bread which will be consumed in one meal, as it is assumed one will remember the meat status without difficulty.
There are several brands of English muffins labeled OUD because they contain dairy ingredients. How does the OU justify the certification of a dairy bread item?
At one time it was argued that English Muffins have a unique shape and therefore the first leniency applies. While this explanation may have been true at one time, the OU no longer considers this valid. At the present, both dairy and parve English Muffins are commercially available. As such, the unique shape of an English Muffin does not currently alert one to the dairy status.
Others have suggested that a single muffin is generally eaten in one sitting, and the second leniency above applies. This reasoning has been rejected as well because muffins are typically sold in packages which should be viewed as one unit. A package of muffins is certainly more than one serving.
Currently, the primary justification to certify dairy English Muffins is that the dairy component is less than one part in 60 which is halachically insignificant (bitul bishishim). Ordinarily, the OU does not certify a product that contains a non-kosher ingredient, even if used in small proportions because, halachically, we are not permitted to intentionally nullify a non-kosher entity. (This is known as bitul issusr lichatchila.) Dairy English Muffins are not comparable because the milk component in of itself is permissible, and when it is mixed in the batter at low levels, the milk does not attain a prohibited status. As such, preparation of dairy English Muffins is justifiable