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In large mixer bowl, combine 1 c. flour, yeast, sugar, nutmeg, & salt; mix well. In saucepan, heat milk, water & shortening until very warm ( shortening does not need to melt) Add to flour mixture; add egg and blend at low speed until moistened. Beat 3 minutes at medium speed. Gradually stir in remaining flour by hand to make a stiff batter. Spread in greased 9 inch cake pan.
Topping- Combine all topping ingredients.
Spread preserves over batter; sprinkle with topping. Cover; let rise in warm place until double, about 25 minutes. Bake at 350 30-35 minutes or until golden brown. Serve warm
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