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SPRINKLE gelatine over 1-1/2 cups of the milk in medium saucepan; let stand 1 min. Cook on low heat 5 min. or until gelatine is dissolved, stirring frequently. Remove from heat. Add remaining 1-1/2 cups milk, the eggnog, sherry and nutmeg; stir until well blended. Refrigerate 1 hour or until chilled.
CUT off crust from pound cake; discard or reserve for another use. Cut cake horizontally into four lengthwise slices. Spread three of the cake slices with jam; stack to reassemble cake. Slice cake into 14 (1/2-inch-thick) slices. Stand eight cake slices around side of 9-inch springform pan; place remaining cake slices on bottom of pan. Set aside.
ADD dry pudding mix to chilled eggnog mixture; beat with wire whisk 2 min. or until well blended. Let stand 5 min. or until mixture begins to thicken. Spoon into prepared pan. Refrigerate 4 hours or until firm.