In the small bowl, whisk together the flour, nutmeg, salt and pepper. Beat eggs in the medium bowl, and alternately add the milk and flour, stirring until smooth. Let the batter stand for 30 minutes.
While the batter rests, melt the butter in the large skillet over medium-high heat until it starts to brown. Add the onion and cook until it begins to caramelize, about 10 to 15 minutes.
Bring the 4-quart pot of lightly salted water to a boil. Press the batter through a spaetzle press into the water. When the spaetzle has floated to the top of the water, remove it to a bowl, draining well. Mix in 1 cup of the cheese. Add the cooked spaetzle to the butter and onions and stir well. Add the remaining cheese, stir, and serve hot.
Baked Spaetzle – Preheat the oven to 375° F/190° C. Lightly grease a 2-quart baking dish. Spread half the spaetzle on the bottom of the dish and top with half the cheese and onions. Repeat with the remaining spaetzle, cheese, and onions. Bake until bubbly, about 15 minutes.
Bacon or Ham – Sauté about 3 ounces of ham or bacon, then cook the onions in the rendered fat and toss with the cooked spaetzle.