Sift together flour, nutmeg, salt and pepper. Beat eggs in a medium bowl. Alternately mix in milk and the flour mixture until smooth. Let stand for 30 minutes.
Bring a large pot of lightly salted water to a boil. Press batter through a spaetzle press into the water. You may also use a potato ricer, colander or a cheese grater. When the spaetzle has floated to the top of the water, remove it to a bowl with a slotted spoon. Mix in 1 cup of the cheese.
Melt butter in a large frypan over medium-high heat. Add onion and cook until golden. Stir in spaetzle and remaining cheese until well blended. Remove from heat, and serve immediately.