Gather your ingredients so that you have everything close at hand on the counter or table.
Using a sharp knife and cutting board, chop 1 cup sweet onion. Coarsely shred 1 medium head cabbage.
Prepare the Spaetzle
In a small bowl, mix together 3 cups all-purpose flour, 2 1/2 teaspoons salt, and 1/4 teaspoon nutmeg.
In a second bowl, whisk 3 large eggs until foamy. Add 1 cup whole milk. Add egg mixture to the flour a little at a time and mix well. Dough will be somewhat stiff.
Fill a large pot with water and bring to a boil. Add 1 tablespoon salt to the water.
Fill the spaetzle maker basket with dough. Slide the basket back and forth over the boiling water. Tiny dumplings will fall into the water and float to the top when they are done (after about 30 seconds). Using a wire strainer, dip them out and place in a large bowl. Keep warm until ready to use.
Make the Cabbage Sauce
In a large skillet, cook 8 oz thick bacon until crispy. Remove bacon and drain on paper towels. When cool, break into small pieces.
Using the same skillet, add prepared chopped onion and shredded cabbage to the bacon grease, mixing well. Cover and simmer until the cabbage is tender, about 15-20 minutes.
Stir in 2 cups whipping cream and dumplings. Continue cooking until the cream starts to thicken. Within minutes, the spaetzle will soak up some of the liquid, creating a creamy dish. Season with 1/2 teaspoon kosher salt and 1/2 teaspoon freshly ground black pepper. Serves 8-10.