Combine sugar and milk in a saucepan, cook over medium heat, stirring constantly, until sugar is completely dissolved and mixture comes to a boil. Boil for 5 minutes, stirring continuously.

Remove from heat. Add chocolate chips, marshmallows, salt, nutmeg and butter. Stir until chocolate and marshmallow are melted. Add nuts if desired.

Spread into a buttered 8x8x2-inch pan. Set aside to cool. Cover and chill 2 hours or until firm. Turn fudge onto cutting board, and cut into squares. Store covered in the refrigerator.

Cook's Note: Cut fudge with a plastic knife and the fudge will not stick to the knife.