Bring wine to a simmer in medium-size, non-aluminum saucepan over medium heat. Add cheese, stirring until melted; mixture will not be smooth. Stir in garlic powder, salt, black pepper, cayenne and nutmeg.
Stir together the cornstarch and water in small bowl until smooth. Stir into the wine-cheese mixture. Simmer over low heat until thickened and smooth, about 2 minutes. Serve immediately with bread chunks and apple slices for dipping; keep the fondue warm over a very low flame.
