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Preheat oven to 400F and set rack on middle or lower middle position. Grease mini donut pans and set aside.
In a large bowl, whisk together flour, sugar, baking powder, cinnamon, and nutmeg.
In another bowl, whisk together milk, eggs, 2 TB melted butter, vanilla extract, and grated apple - we use the largest holes of the box grater. Then squeeze out as much juice as you can. (Save juice for drinking - yum!)
Use rubber spatula to fold wet ingredients with dry ingredients, gently folding just until combined; do not over-mix or it won't be as tender. Spoon or pipe batter into greased mini donut pans until batter is level with the top of pan. Use damp fingers to gently smooth out the tops.
Bake about 8-9 minutes or until lightly golden. Cool in pan slightly, just until they are able to be easily removed. Set donuts on wire rack while you make the cinnamon-sugar coating.
Whisk together the sugar with desired amount of cinnamon in a small bowl - this can be done days ahead of time. Melt butter in another small bowl. When ready to eat, dip donuts in melted butter and roll generously in cinnamon sugar. Enjoy immediately.