Mix flour, milk, egg, baking powder, and nutmeg. Add to the potatoes and then add the melted butter.
Heat some peanut oil in a skillet and fry until golden on one side. Flip, and cook the same way on the other.
**For Passover, omit the baking powder and replace the flour with matzo (ground into flour), which will make a slightly denser latke. Fry it slowly.