Melt 1/2 cup butter in a heavy saucepan over low heat; add flour, stirring until smooth. Cook 1 minute, stirring constantly. Gradually add m ilk; cook over medium heat, stirring constantly, until thickened and bubbly. Stir in nutmeg.
Pour milk mixture into a greased 1-quart casserole. Combine sugar and cinnamon; sprinkle sugar mixture evenly over milk mixture. Dot with butter. Broil 6 inches from heating element 8 minutes or until butter melts and pudding is lightly browned. Spoon into individual serving bowls. Serve hot or cold.