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1. Preheat oven to 350F. Grease twelve 2-1/2-inch muffin cups; set aside.
2. In a medium bowl stir together flour, the 1/2 cup sugar, the baking powder, nutmeg, and salt. Make a well in the center of the flour mixture. In a small bowl beat egg with a fork; stir in milk and the 1/3 cup melted butter. Add egg mixture to flour mixture all at once. Stir just until moistened (batter will be lumpy).
3. Spoon batter into prepared muffin cups. Bake in the preheated oven for 20 to 25 minutes or until a wooden toothpick inserted in centers comes out clean.
4. Meanwhile, combine the 1/4 cup sugar and the cinnamon. Cool muffins in muffin cups on a wire rack for 5 minutes. Remove from muffin cups. Dip muffins into the 1/4 cup melted butter, then into sugar-cinnamon mixture. Serve warm. Makes 12 muffins.