Cook unpeeled potatoes in a small amount of boiling, salted water about 30 minutes or until tender. Peel potatoes while still warm. Press through a potato ricer or coarsely mash with potato masher.
In a small bowl, combine the 1 cup flour, the 3 tablespoons bread crumbs, the baking powder, the 1 teaspoon salt, the parsley or chives, nutmeg, and pepper. Add to potatoes and toss until well mixed. Stir in eggs.
Using floured hands, shape mixture into 10 balls. Insert a crouton into the center of each ball. Dust each with additional flour.
In a Dutch oven, combine the boiling water and the 3/4 teaspoon salt. With a spoon, drop dumplings into water. Cover and simmer dumplings for about 20 minutes or until a toothpick comes out clean. Do not lift cover.
In saucepan, heat and stir butter until browned. Stir in the 1/4 cup bread crumbs; sprinkle over dumplings. Makes 10 side-dish servings.