Preheat the oven to 375 degrees. Grease your donut pan. In a large bowl mix flour, sugar, baking powder, nutmeg and salt.
Stir in milk, eggs, vanilla and butter. Beat together until blended well.
Fill each donut hole halfway full.
Bake at 375 for 12 minutes.
Pop them out of the pan and they are ready to decorate.
We made three varieties of donuts: cinnamon sugar, powdered sugar, and glazed with sprinkles. I mixed up some white sugar and cinnamon in a bag and coated the donut with a little bit of cooking spray. Next I dropped the donut in the bag and shook it around.
To make the glaze, simply mix the confectioner's sugar with the hot water until it is no longer lumpy. Dip the top of the donut in the glaze and shake on some sprinkles.