Cinnamon Doughnuts

3 cups all-purpose flour
1 cup sugar, divided
1 tbl. baking powder
2 tsp. cinnamon, divided
1/2 tsp. salt
1/4 tsp. nutmeg
1 cup skim milk
1/4 cup butter, or margarine-melted
1 egg
vegetable oil for frying

Combine flour, 1/2 cup sugar, baking powder, 1 tsp. cinnamon, salt and nutmeg.
In a large bowl combine milk, butter and egg; stir in flour mixture until combined. Cover and refrigerate 30 minutes. Turn dough out onto lightly floured surface. Using lightly floured rolling pin roll out dough to 1/2" thickness. Using a doughnut cutter, cut out doughnuts, reserving holes.
In skillet heat 1" oil over high heat to 375* or heat oil in a deep-fat fryer. Gently drop dough in batches into oil. Fry, turning twice, until puffed and golden, 1-2 minutes per side; fry holes 1 minute per side.
Combine remaining sugar with remaining cinnamon; toss with warm doughnuts and holes.