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Stir together 2 cups flour and yeast in a large bowl; set aside. Heat and stir milk, sugar, water, margarine (or butter), salt and cinnamon in a small saucepan over medium heat just until warm (120-130°F) and the margarine (or butter) almost melts.
Add milk mixture to flour mixture along with egg. Beat with an electric mixer on low to medium speed for 30 seconds, scraping sides of bowl. Beat on high speed for 3 minutes. Using a wooden spoon, stir in as much of the remaining 2 cups flour as you can. (The dough should be just stiff enough to knead.)
Turn dough out onto a lightly floured surface. Knead in enough of the remaining flour to make a moderately soft dough that is smooth and elastic (3 to 5 minutes total).
Shape dough into a ball. Place in a lightly greased bowl, turning once to grease entire surface of dough. Cover, let rise in a warm place until double in size (45 to 60 minutes). Punch dough down. Cover and let rest 10 minutes.
Meanwhile, lightly grease a baking sheet; set aside. Combine dried plums and chocolate; set aside.
Roll dough on lightly floured surface into a 15x10-inch rectangle. Sprinkle about one-fourth of the chocolate mixture over a 3-inch strip of dough along a 10-inch side. Brush edges of dough with water.
Fold dough over filling, allowing the long edge of dough to extend beyond topped dough. Add another one-fourth of the chocolate mixture on top of the filled layer, pressing filling lightly. Brush edges of dough with water. Fold dough back over filling. Repeat filling and folding dough accordion-style twice more. Fold remaining dough on top; press lightly. Gently pat sides of the loaf to form a rectangle.
Place shaped dough on prepared baking sheet. Cover; let rise in a warm place until nearly double (about 30 minutes).
Preheat oven to 350°F. Using a sharp knife, score top layer of loaf once lengthwise down the center and then crosswise at 1-inch intervals, creating a large checkerboard-type pattern. Insert two long wooden skewers (one close to the end of the loaf) completely through the loaf to keep the bread layers from slipping while baking.
Bake for about 35 minutes or until bread sounds hollow when you lightly tap the top with your fingers; if necessary, cover with foil the last 20 minutes of baking to prevent overbrowning. Transfer bread to a wire rack; cool completely. Remove skewers. If desired, sprinkle with confectioners' sugar.