Combine 1 cup of milk and heavy cream and set aside.
Whisk in a medium bowl just until blended: egg yolks, sugar and nutmeg.
Heat 2 cups of milk and heavy cream in a large saucepan over medium-low heat.
While whisking, slowly add part of the hot milk and cream mixture to the egg yolks. Then slowly pour the cream and egg mixture back into the saucepan, stirring constantly, until the mixture reaches a temperature of 160°F. Do not overheat or the mixture will curdle.
Remove from heat and immediately stir in an additional cup of milk and another cup of heavy cream. Pour through a fine mesh strainer into a storage container. Chill thoroughly, uncovered.
Once chilled, stir in 2 cups of brandy, Cognac, dark rum, or bourbon. For a nonalcoholic alternative, 2 tablespoons vanilla or 1½ cups strong coffee can replace the spirits. Cover and refrigerate for at least 3 hours, or up to 3 days. Serve sprinkled with freshly grated nutmeg. Makes 16 servings.