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Tapioca Pearl Pudding

['2 cups whole milk', '1 cup heavy cream', '1 tablespoon nonfat dry milk powder', '1/8 teaspoons kosher salt', '1/3 cup small pearl tapioca (not instant or quick-cooking)', '1/3 cup sugar', '1 large egg yolk, beaten to blend', 'Freshly grated nutmeg (for serving)']

Whisk milk, cream, milk powder, and salt in a medium saucepan; add tapioca and let sit 30 minutes to hydrate. Add sugar to tapioca mixture and bring to a simmer over medium heat.
Reduce heat to medium-low and cook, stirring often, until the consistency of a thick soup, 10-12 minutes. Whisk in egg yolk and cook, stirring occasionally, 2 minutes (it will thicken slightly). Let cool, stirring occasionally, 10 minutes.
Divide among small glasses. Chill pudding until cold (it will thicken), at least 2 hours. Serve topped with nutmeg.
Do ahead: Pudding can be made 3 days ahead. Cover and keep chilled.

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