Preheat oven to 425ºF.
In a saucepan, heat butter, water, whole milk, salt, cayenne pepper, and nutmeg and bring to a boil. Immediately add the flour all at once and reduce heat to medium. Using a wooden spoon, combine the ingredients. Stir vigorously until the dough pulls from the sides and forms a ball. Continue to stir for another two minutes to cook off the raw flour flavor and evaporate some of the liquid. Remove from heat and let cool for three minutes.
I make gougères often, maybe three times a week. They are the perfect bite to come out of the oven when your guests arrive and the gougères serve well with our Chardonnay.
They are simple to make and pack an elegant, impressive punch.
I have made them to varying degrees of involvement, precision, and difficulty. I most often go for this easy version, described here.