In a bowl stir together flour, sugar, baking powder, and nutmeg. Using a pastry blender, cut in butter until pieces are size of small peas. Make a well in center. Mix together egg and milk; add all at once to flour mixture. Using a wooden spoon, stir until dough is moistened. Gently knead in bowl until combined.* Divide dough in half. Cover and chill about 2 hours.

Line a cookie sheet with foil; set aside. On a lightly floured surface, roll half of the dough at a time to 1/8-inch thickness (keep remaining dough refrigerated). Using a 3- or 5-1/2-inch angel-shaped cookie cutter, cut out dough. Place angels 1 inch apart on prepared cookie sheet.

If making 3-inch angels, cut a bell from center of angle using a 1-1/2-inch bell-shaped cookie cutter. If making 5-1/2-inch angels, cut 2 bells from bottom of angel using a 1-1/2-inch bell-shaped cookie cutter. Fill bell cutouts with crushed candies, using about 1/4 to 1/2 teaspoon candy per bell. If desired, sprinkle with edible glitter.

Bake in a 375 degree F oven for 7 to 9 minutes or until edges are firm and lightly browned. Cool on cookie sheet for 1 minute. Transfer cookies to a wire rack; cool. If desired, decorate angels by piping on Powdered Sugar Icing. Makes about 48 (3-inch) or 16 (5-inch) angel cookies.

In a small bowl stir together 1 cup sifted powdered sugar and enough milk (about 2 to 3 teaspoons) to make icing of piping consistency.

To prepare dough using a large food processor, place flour, sugar, baking powder, and nutmeg in the food processor bowl. Cover and process until mixed. Add pieces of butter. Cover and process with several on/off turns until the mixture forms fine crumbs. Mix egg and milk; add to flour mixture. Cover and process until mixture is just moistened. Continue as above, beginning at Step 2.