Separate egg whites from yolks. Place egg yolks in a medium mixing bowl and set the egg whites aside.
Add sugar to the egg yolks and whisk vigorously until mixture is pale yellow and fluffy. Set aside.
In a medium saucepan, heat milk, whipping cream, and ½ teaspoon freshly ground nutmeg over medium heat until just before it boils. (Bubbles will form around the top edge of the milk mixture and it will begin to steam.
Remove from heat.
To temper the eggs, spoon one ladle full of the hot milk mixture and whisk it into the egg mixture. Continue adding ladles of the hot milk to the egg mixture until most has been added.
Slowly drizzle the egg mixture back into the saucepan, whisking as you do so.
Heat over medium, stirring constantly, until mixture begins to thicken. DO NOT BOIL. The mixture should not be heated above 160°°F.
Remove from heat and stir in vanilla extract and bourbon.
Cover with plastic wrap and place in the refrigerator to cool for at least 1 hour.
Serve with freshly grated nutmeg.
Eggnog with alcohol will keep for several weeks in the refrigerator and will become more rich and flavorful over time. Eggnog with no alcohol or even light amounts of alcohol will keep and develop more flavor over a few days in the fridge.