Recipe: New Orleans Beignets

Here's the recipe for beignets - we just went to New Orleans last year but off hand I don't recall the origin of them - I'll see if I can find out for you. They are very popular in New Orleans and well known at the Cafe Dumond.
New Orleans Beignets
Scald 1 cup of milk
Add 1/4 cup sugar
1/4 t. salt
1/2 t. nutmeg
Cool to lukewarm
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Dissolve 1 pkg. dry yeast into 2 T. warm water.
Mix yeast, 2 T. oil, 1 egg with milk mixture.
Add 3 1/2 cups flour and beat well. Cover with towel and store 1 hour in warm place. Knead dough on floured surface. Roll out and cut into 1/4" thich, 2 x 3 rectangles. Cover and let rise 45 minutes.
Fry in deep fat (375 degrees) until golden brown. Drain and dust with confectioners sugar. Serve warm.