Heat oven to 375°F. Line a large baking sheet with nonstick foil, or coat with nonstick cooking spray. In a small bowl, combine cranberries and water. Let stand 5 minutes, then drain.
In a large bowl, combine apples, softened cranberries, honey, flour, cinnamon and nutmeg. Toss until combined.
Unroll phyllo on work surface; cover with damp towel. Separate one sheet and place on clean surface. Spray lightly with nonstick cooking spray, and dust with a little ground cinnamon. Place another sheet on top; coat with spray and dust with cinnamon. Repeat 6 more times, coating each with spray and dusting with cinnamon.
Spoon filling along a long side of phyllo, 3 inches in from edge, leaving 1 inch at either end. Fold both short sides (ends) over filling. Fold 3-inch-wide long strip over filling; roll up, jelly-roll-style. Place, seam side down, on foil-lined baking sheet. Spray with nonstick cooking spray and sprinkle with cinnamon.
Bake at 375°F for 35 minutes, until nicely browned. Let cool on rack for at least 20 minutes. Slice with a serrated knife; best served the same day.