Before boiling water, in a small bowl mix a little flour into some water to make a paste to thicken the syrup. Make sure to remove any lumps of dry flour from mixture. Set aside.
Bring water to a rapid boil, lower heat, add sugar and stir constantly. Add several dots of butter. Stir. Add flour water paste to thicken (add more or less to your preference). Let cook 1-1 1/2 minutes. Add vanilla flavoring and nutmeg.
Serve warm over pancakes, toast, or biscuits. Cover and refrigerate any leftovers for 1-2 days.