Baked Doughnuts

1. Place 1/3 cup warm milk and yeast in a mixing bowl and set aside for 5 to 10 minutes. (Milk should be warm but not scalding.  If it is too hot, it will kill the yeast.)
2. Stir butter or margarine, sugar and remaining milk into yeast.  Add eggs and beat well.
3. Dump flour into mixing bowl and sprinkle nutmeg evenly over the top.  Blend to form a soft dough. 
4. Turn dough out onto a lightly floured surface a knead.  Dough should be slightly sticky.
5. Transfer to a greased bowl.  Cover and set in a warm place to rise until doubled in size (about 1 hour).
6. Roll dough out on a floured surface to 1/2 inch thickness.
7. Cut with a doughnut cutter and transfer to a parchment-lined baking sheet.
8. Bake for 8 to 10 minutes until golden brown.
9. While still warm, dip in melted butter and roll in cinnamon and sugar mixture.