Preheat oven to 425*
Butter the bottom and sides of a 10" baking dish.
Slice onions in half and then slice thinly.
In a large unheated skillet, combine the onions, butter, thyme, salt, pepper and nutmeg. Sweat* over a moderate heat, covered, until the onions are soft, but not caramelized or brown.
Crack the eggs into a medium-sized bowl and whisk just to blend. Whisk in the milk and cream.
Spread the onions out in the baking dish. Pour the egg mixture over them and season with additional salt and nutmeg. (Don't skip the nutmeg...it really does add that certain "je ne sais quois").
Bake until the top is deep golden brown and the custard is firm, about 30 minutes.
Let it sit for about 5 minutes to firm up. Serve warm.
*Sweat: To bring out the moisture and cook without browning.