Baked Cinnamon Sugar Doughnuts

Ingredients

• 1/3 cup milk
• 1/3 cup water
• 1 (2-1/4 tsp.) envelope Fleischmann's ® Active Dry Yeast
• 2 to 3 cups all purpose flour
• 3 tablespoons sugar
• 1 teaspoon freshly grated lemon peel
• 1/2 teaspoon salt
• 1/4 teaspoon ground nutmeg
• 3 tablespoons butter OR margarine, softened
• 1 egg
• 1/2 cup butter OR margarine, melted
• 1/2 cup sugar
• 2 teaspoons ground cinnamon