Nutmeg is not a nut. It is a seed of the nutmeg tree and is used as a spice. The nutmeg tree is an evergreen tree that grows in Indonesia.
Nutmeg is often used to add flavor to desserts such as apple pie and to drinks such as eggnog. The best way to store it is as a whole seed. A microplane can be used to grate off nutmeg as needed.
The nutmeg seed is surrounded by a red membrane called mace, which can also be used as a spice. The intensity of mace is somewhat less than that of nutmeg.