Heat 1 tablespoon butter in large pot over medium heat. Add shallots, nutmeg, salt and pepper. Add spinach, working in batches if necessary, and cook, stirring constantly, 5 to 8 minutes or until all spinach wilts. Remove from heat.
Heat remaining 1 tablespoon butter in medium-size saucepan. Stir in flour; cook over medium heat for 2 minutes. Slowly whisk in the milk; cook, stirring, until all lumps are gone. Stir mixture into the spinach in the pot; cook, stirring, for 2 minutes or until heated through.
Serve hot, garnished with chopped hard-cooked egg.