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PREHEAT oven to 350°F. Mix flour, oats, 2 Tbsp. of the brown sugar and 1/4 tsp. of the cinnamon in medium bowl. Cut in butter until mixture resembles coarse crumbs; set aside.
MIX water, remaining 1/2 cup brown sugar, the raisins, tapioca, remaining 1 tsp. cinnamon and the nutmeg in large saucepan. Stir in apples. Cook on medium heat until mixture comes to full boil, stirring constantly. Pour into 8-inch square baking dish; sprinkle with flour mixture.
BAKE 30 to 35 min. or until juices form bubbles that burst slowly.