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1. In a large mixing bowl, stir together 1-1/2 cups of the flour, the yeast, and nutmeg. In a small saucepan heat and stir milk, sugar, the 2 tablespoons shortening, and salt just until warm (120 degrees F to 130 degrees F) and the shortening is almost melted.
2. Add milk mixture to the flour mixture. Add the egg. Beat the mixture with an electric mixer on low speed for 30 seconds, scraping bowl. Beat on high speed for 3 minutes. Using a spoon, stir in enough of the remaining flour to make a soft dough.
3. Place the dough in a greased bowl; turn once to grease the surface. Cover and refrigerate the dough for 4 to 24 hours.
4. Turn dough out onto a slightly floured surface. Cover; let rest 10 minutes. Roll into a 15x12-inch rectangle; cut into thirty 3x2-inch rectangles. Cover; let rest 20 minutes (dough will not be doubled).
5. Heat 3 inches of shortening or oil in a deep saucepan to 375 degrees F. Fry a few dough rectangles at a time in hot fat about 1 minute or until beignets are golden brown on both sides, turning once. Drain on paper towels. Keep warm in a 300 degrees F oven while cooking remaining beignets. If desired, lightly sift powdered sugar over beignets. Serve warm, drizzled with honey. Makes 30 beignets.