In a medium bowl, whisk together flour, baking powder, nutmeg and salt. Set aside.
In a large bowl, beat sugar, eggs, melted butter, milk and vanilla extract until well combined.
Add flour mixture and mix just until combined. Do not over mix. A few lumps are okay.
Fold in chopped blueberries.
In a heavy saucepan, heat 1 1/2 inches of oil to 340ºF.
Drop tablespoon size portions of batter into hot oil. I used a #60 portion scoop.** Don't overcrowd the pan.
Cook donut holes until golden brown on all sides, about 2-4 minutes, flipping halfway through. If donut holes cook too quickly on the outside, turn heat down.
Briefly drain donut holes on paper towels, then toss warm donut holes in blueberry sugar. Serve immediately.