1. Preheat oven to 375°.
2. Grease a 24 cup mini muffin pan.
3. In a large bowl, whisk together flour and baking powder; whisk in the milk and egg; stir in the mozzarella and pepperoni; let stand for 10 minutes.
4. Stir the batter and divide among the muffin cups.
5. Bake until puffed and golden, 20-25 minutes.
6. Microwave pizza sauce until warmed through.
7. Sprinkle puffs with basil and serve with sauce.