In a large bowl, combine 1/4 cup butter and honey until smooth; set side.
In a large bowl, beat eggs until lemon-colored. Beat in yogurt and remaining butter until smooth. Combine the flour, baking powder, baking soda, nutmeg and salt; stir into yogurt mixture.
In a deep-fat fryer or electric skillet, heat oil to 360°. Drop batter by teaspoonfuls into oil. Fry until golden brown, about 1 minute on each side. Drain on paper towels. Serve warm with the honey butter.