PREHEAT oven to 350° F. Grease 12-cup bundt pan.
MICROWAVE 1 cup morsels in small, microwave-safe bowl on MEDIUM-HIGH (70 percent) power for 1 minute; stir. Microwave at additional 10- to 20-second intervals, stirring until smooth. Cool to room temperature.
COMBINE flour, granulated sugar, baking powder, cinnamon, salt and nutmeg in medium bowl. Stir together melted morsels, pumpkin, vegetable oil, eggs and vanilla extract in large bowl with wire whisk. Stir in flour mixture. Spoon batter into prepared bundt pan.
BAKE for 40 to 50 minutes or until wooden pick inserted in cake comes out clean. Cool in pan on wire rack for 30 minutes; remove to wire rack to cool completely. Sprinkle with powdered sugar. Serve with Butterscotch Sauce.
FOR BUTTERSCOTCH SAUCE: HEAT 1/3 cup Nestle Evaporated Milk in medium, heavy-duty saucepan over medium heat just to a boil; remove from heat. Add remaining morsels; stir until smooth. Return to heat. Stirring constantly, bring mixture just to a boil. Cool to room temperature. Stir before serving.