In a large bowl, cream shortening and sugar. Beat in egg. Combine flour, baking powder, salt and nutmeg. Add to creamed mixture alternately with milk (batter will be stiff).
Fill greased miniature muffin cups two-thirds full. Bake at 350° for 20-25 minutes or until a toothpick comes out clean. Combine sugar and cinnamon. Remove puffs from pans; immediately roll in butter, then in cinnamon-sugar. Serve warm.
Editor's Note: Twelve regular-size muffin cups may be used; bake for 15-20 minutes.