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1. In a mixing bowl combine flour, the 1/2 cup sugar, baking powder, nutmeg, and salt. Make a well in the center of the dry ingredients.
2. In another bowl beat egg slightly; stir in milk and 1/3 cup melted butter or margarine. Add egg mixture to flour mixture. Stir just until moistened (the batter may be lumpy). Lightly grease muffin cups. Fill cups about two-thirds full with batter. Bake in a 350 degree F oven for 20 to 25 minutes or until muffins are golden.
3. Meanwhile, in a shallow bowl combine the 1/4 cup sugar and cinnamon. Immediately dip tops of hot muffins into the 1/4 cup melted butter or margarine, then into the cinnamon-sugar mixture until coated. Serve warm. Makes 12 muffins.