In a large bowl, place 2 cups flour, the yeast, ½ teaspoon nutmeg, and the lemon peel. Ina small saucepan heat the milk, water, ½ cup of sugar, oil and salt to lukewarm, stirring to dissolve the sugar. Slowly add the milk mixture to the flour mixture, beating at medium speed. Continue to beat for 2 min. Mix in the eggs. Add 1 cup of flour and mix for 1 min. With a wooden spoon, add enough flour to make a medium stiff dough. Turn the sough out onto a lightly floured surface, and knead until smooth and shiny, about 8 min. Place the dough n a greased bowl, turning to coat all sides. Cover and let rise ina draft free area until doubled in bulk, about 1 hour.
Punch the dough down and divide into thirds. Cover and let rest 10 min. \Preheat the oven to 375º. Heavily butter a 10” tube pan. Divide each third of the dough into 16 pieces. Roll each piece into a ball. Spread half of the mincemeat over the bottom of the pan. Mix the remaining 1-1/2 teaspoons nutmeg and 1-1/2 cup sugar together. Dip half of the balls in the melted butter and then in the sugar nutmeg mixture. Arrange the balls over the mincemeat. Spread the remaining mincemeat over the dough balls and top with the remaining dough balls dipped in the butter and then in the sugar mixture. Cover and let rise in a warm place until doubled in bulk, about 1 hour.
Place the pan on a baking sheet and bake for 3-35 min or until lightly browned. Let the cake cool in the pan for 3 min and invert onto a serving platter. Serve warm.