Grapenuts Custard

INGREDIENTS:-
2 cups milk
1 teaspoon vanilla extract
3/4 cup wheat and barley nugget cereal (e.g. Grape-Nuts™)
2 tablespoons butter or margarine, cut into small pieces
2 cups hot water
1/2 cup white sugar
1/8 teaspoon salt
3 large eggs
1/2 teaspoon ground nutmeg (optional)

METHOD:-

1. Preheat an oven to 350 degrees F (175 degrees C).
2. Beat the milk, sugar, salt, eggs, and vanilla together in a bowl; pour into a baking dish. Sprinkle the cereal over the mixture and dot with the butter pieces. Gently set the baking dish into a larger baking dish. Pour enough hot water into the larger dish to reach at least 1 inch up the side of the dish with the custard.
3. Bake in the preheated oven until a toothpick inserted into the center comes out clean, about 1 hour. Sprinkle the nutmeg over the dish to serve.