In a medium saucepan, combine water, butter, and salt. Bring to a boil over medium heat.
Once boiling, remove from heat and stir in the flour until fully combined and a dough forms. Let the mixture cool for about 5 minutes.
Add eggs one at a time, mixing well after each addition until the dough is smooth and glossy.
Stir in the vanilla extract and nutmeg, if using.
Transfer the dough to a piping bag fitted with a star tip. Pipe 4-inch rings onto parchment paper, making sure to connect the ends to form a circle.
In a deep pot, heat the oil to 350°F. Carefully place the crullers into the hot oil, frying a few at a time for about 3-4 minutes on each side, or until golden brown.
Use a slotted spoon to remove them and drain on paper towels.
Once cooled, dust the crullers with powdered sugar before serving.