Low Fat Scalloped Potatoes

4 medium baking potatoes, boiled, peeled and thinly sliced (reserve cooking water)
1/2 medium onion, thinly sliced
1/4 cup instant nonfat powdered milk
1 cup potato cooking water
1 tablespoon olive oil
Freshly ground nutmeg
Salt, freshly ground pepper

Layer potato and onion slices in lightly oiled 2-quart baking dish. Combine powdered milk, potato water and oil in blender and process until smooth. Pour over potato slices. Sprinkle top with nutmeg, salt and pepper to taste. Cover with foil. Bake at 375 degrees 45 minutes or until potatoes have absorbed most of liquid. Remove foil and bake 15 minutes longer or until browned. Makes 4 servings.