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PREHEAT oven to 400°F. Combine baking mix, 2 cups of the cereal, 1/4 cup of the brown sugar and 1/2 cup of the walnuts in large bowl. Add applesauce, milk and egg; stir just until dry ingredients are moistened.
SPOON batter evenly into paper-lined medium muffin pan, filling each cup 3/4 full. Combine remaining 1/4 cup cereal, 1/4 cup walnuts and 2 Tbsp. brown sugar. Sprinkle over batter.
BAKE 18 to 20 min. or until wooden pick inserted in centers comes out clean. Serve warm or cooled.