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In a bowl, combine the flour, sugar, baking powder, salt and nutmeg. In a small bowl, combine egg, milk and butter. Add to dry ingredients and mix well. In an electric skillet or deep-fat fryer, heat oil to 375 degrees. Drop dough by heaping teaspoonfuls, five or six at a time, into oil. Fry until browned, about 1-2 minutes, turning once. Drain on paper towel. Roll in powdered sugar and granulated sugar.
Yield- about 3 dozen.
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