In a small skillet, toast the cumin seeds over medium heat until fragrant, 1 to 2 minutes. Transfer to a mortar and pestle and lightly crush. (Alternatively: Place the toasted seeds on a cutting board and use the bottom of a skillet to lightly crush them.)
In a small bowl, combine the crushed cumin seeds, yogurt, water, sugar and salt. Makes 1¼ cups of sauce.