Peel and slice potatoes 1/8 inch thick and place in a saucepan filled with salted water over medium heat. Bring to a boil, reduce heat, and simmer until tender, about 20 minutes. Drain, reserving 1/2 cup of the cooking water.
Melt butter in a large skillet over medium heat. Add onions and garlic and cook slowly until tender, about 10 minutes. Stir in flour, followed by milk, stirring until thickened and bubbling. Add cheese and stir until melted. Remove from heat and stir in potatoes. If needed, stir in several tablespoons of cooking water to make a sauce.
Season with nutmeg, and salt and pepper to taste. Set aside.