Preheat oven to 400 degrees F. Layer potatoes in a 2-quart baking dish. Top with the orange slices. In a small saucepan melt butter and sugar together over medium-low heat. Remove from heat. Stir in orange juice and vanilla. Pour over potatoes and orange slices. Cover and bake 30 minutes. Uncover and bake an additional 20 to 30 minutes more or until potatoes are tender and browned, spooning juices over potatoes halfway through the uncovered baking time. Grate nutmeg over the top and serve warm.