Baked Doughnut Puffs

2 Tablespoons shortening

1/2 cup sugar

1 egg

2 cups flour -- sifted

1/2 teaspoon salt

1 tablespoon baking powder

1/2 teaspoon ground nutmeg

1/2 cup milk

1/2 cup chopped walnuts

1/4 cup powdered sugar

1/2 teaspoon ground cinnamon

1/4 cup butter -- melted

Cream shortening, sugar & egg until light and fluffy. Sift together flour, salt, baking powder and nutmeg. Add alternately with milk to creamed mixture. Mix well to a stiff dough. stir in nuts. Drop by tablespoon into well greased small size muffin pan cups. Bake at 400� for 20 minutes. Combine powdered sugar and cinnamon in paper bag. Dip top of doughnut in melted butter, shake 2 or 3 at a time in bag with sugar.