Preheat oven to 350 degrees.
Use butter or non-stick cooking spray to coat the inside of 12 muffin tins.
Sift flour, baking powder, salt and nutmeg into a bowl and set aside.
In a separate bowl beat the butter and sugar until creamy.
When well blended, beat in the egg and mix well.
Add one third of flour mixture on low speed just until the flour is incorporated, then add half of the milk, continue adding another third of flour mixture then the rest of the milk.
End with the remaining flour mixture.
Mix just until batter is smooth.
Divide the batter into the muffin tins, about half full.
Bake until firm and toothpick inserted in middle comes out clean, about 18 minutes. Cool in pan for five minutes.
Mix sugar and cinnamon in a bowl.
Add melted butter to another bowl.
While cupcakes are still warm roll in melted butter and then in the cinnamon/sugar mix. Cover the cupcakes completely or just the tops.