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Preheat oven to 400°F. Lightly grease 12 muffin cups or line with paper baking cups. Set aside. Mix 2 cups flour, 2/3 cup sugar, baking powder, baking soda and nutmeg in large bowl. Mix applesauce, milk, oil, egg and cinnamon flavor in medium bowl. Add to flour mixture; stir just until dry ingredients are moistened.
Spoon batter into prepared muffin cups, filling each cup 2/3 full. Mix remaining 1/3 cup flour, remaining 1/4 cup sugar and butter. Sprinkle over batter.
Bake 18 to 20 minutes or until toothpick inserted in center of muffins comes out clean. Serve warm.