Pip's Original Doughnuts
This place is straight-up doughnut heaven.
I've come to learn as a "Portlander" (I see all you natives rolling your eyes at me) that Voodoo Donuts is not ultimate doughnut destination. While you can no doubt get a tasty treat there, the novelty of Voodoo is really what makes it special.
As far as taste, goes though, Pip's is up there with Blue Star as being pretty darn exceptional. They make the doughnuts fresh when you order them, so they come out warm and delicious.
They are cute and tiny; four doughnuts is about the size of a regular full size doughnut. And since they are so small, you can try all the flavors and not feel gluttonous at all (okay... maybe a little gluttonous).
Pip's has four main doughnut flavors and two changing flavors. You should try the Dirty Wu. Or the cinnamon sugar. Or the maple bacon. Basically they are all pretty bomb.
Also, Chai. In a flight. Like beer. But better. Okay, I'll stop typing in fragmented sentences.
Basically, though, if you are in Portland and you like doughnuts you should go to Pip's.