2    cups sugar

          4    cups peeled, diced apples

          2    cups flour

    1 1/2    teaspoons baking soda

          1    teaspoon salt

          2    teaspoons cinnamon

       1/2    teaspoon nutmeg

          2    eggs, beaten

          1    scant cup oil

          2    teaspoons vanilla

          1    cup nuts, optional

       1/2    cup water

          1    cup sugar

       1/2    cup light cream

       1/2    teaspoon vanilla

                Dash of nutmeg

Pour sugar over apples, stir together and set aside. Sift together the next five ingredients. Combine eggs, oil, vanilla and nuts. Mix with dry ingredients and apples. Pour into a lightly greased 9 x 13-inch baking pan. Bake at 350 degrees for 45-55 minutes. While cake is baking, prepare the sauce by combining the water, 1 cup sugar and light cream. Heat slowly for 10-15 minutes, stirring occasionally until thickened. Remove from heat and stir in      1/2 teaspoon vanilla and the nutmeg. Serve warm sauce over the apple cake.