Preheat oven to 350. Grease a 3-quart rectangular baking dish; set aside.
In a large bowl combine eggs and the 1/2 cup milk. Stir in crackers, onion, celery salt, 1/4 teaspoon of the nutmeg, and the pepper. Add ground beef; mix well. Shape meat mixture into 20 meatballs. Arrange meatballs in the prepared baking dish. Bake for 30 minutes or until meatballs are done (160F).
For the sauce, in a medium saucepan combine soup, the 3/4 cup milk, and the remaining nutmeg. Cook and stir over medium heat until heated through.
To serve, transfer meatballs to a serving bowl. Spoon sauce over meatballs.
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