To make the custard, whisk the yolks, eggs, and half of the sugar together in a large bowl. In a medium saucepan, whisk together the remaining sugar, milk, vanilla, salt, and nutmeg, then bring to a boil. While whisking the yolks constantly, gradually pour the milk mixture into the yolk mixture. Set aside.

In a bowl, evenly toss the bread and chocolate together and then put into a buttered 8-cup gratin dish. Pour the custard over the bread. Stir the bread a little so the custard settles evenly in the pan. Cover tightly with foil and set aside for 10 minutes.

Place a rack in the middle of the oven and preheat to 325 degrees F.

Place the gratin dish in a larger baking dish and place on the rack. Pour enough hot water into the baking dish to reach halfway up the gratin dish. Bake the bread pudding until just set, but still wiggle-y, about 40 minutes.

Remove from the oven and cool completely before serving.