Place potatoes in a saucepan and cover with water. Bring to a boil. Reduce heat; cover and simmer for 15-20 minutes or until tender. Drain.
Over warm burner or very low heat, stir potatoes for 1-2 minutes or until steam is evaporated. Press through a potato ricer or strainer into a small bowl; cool slightly. In a Dutch oven, bring 3 qts. water to a boil.
Using a fork, make a well in the potatoes. Sprinkle flour over potatoes and into well. Whisk the egg, salt and nutmeg; pour into well. Stir until blended. Knead 10-12 times, forming a soft dough.
Divide dough into four portions. On a floured surface, roll portions into 1/2-in.-thick ropes; cut into 3/4-in. pieces. Press and roll each piece with a lightly floured fork. Cook gnocchi in boiling water in batches for 30-60 seconds or until they float. Remove with a strainer and keep warm.
In a large heavy saucepan, cook butter over medium heat for 3 minutes. Add garlic and sage; cook for 1-2 minutes or until butter and garlic are golden brown. Add gnocchi; stir gently to coat.