Line a 9-inch square pan with aluminum foil and set aside. Spray sides of a large saucepan with butter-flavored nonstick cooking spray.
Bring eggnog and sugar to a rolling boil at medium heat stirring constantly with a wooden spoon. Let boil for two minutes exactly with the heat turned down to the lowest setting that will maintain the boil. Stir occasionally to keep the mixture from boiling over or burning.
Fold in marshmallows, cinnamon, and nutmeg; the boil will probably stop until the marshmallows completely dissolve. Bring mixture back to a rolling boil for another 6 full minutes (start timing when the boil resumes). Stir constantly. The mixture will start to turn brown during the boil. If you get brown flakes in the mixture, reduce the heat a little.
Remove from heat and add butter, chips, and nuts. Stir until thoroughly mixed or until fudge starts to lose its glossy appearance.
Pour into prepared pan. Sprinkle with nutmeg. Cool at room temperature.
Remove from pan, remove foil and cut into 1-inch squares.