Heat 2 T. olive oil in a small skillet over medium heat. Add onion, season with salt and pepper, and cook for 5 minutes. Reduce heat to low and cook an additional 15 minutes, until onions are lightly browned and carmelized.
Stir in spinach and nutmeg. Cook another 5 minutes. Set aside.
In a heavy, oven-safe skillet, melt 3 T. butter or margarine with 1 T. olive oil over medium heat. Remove from heat and place a layer of potatoes in the pan. Layer in over-lapping circles. Salt and pepper to taste.
Top with spinach and onion mixture. Bake at 400 degrees for 10 minutes. Remove from the oven. Add 1 c. shredded cheese on top of the filling mixture.
Use the remaining potato slices to add another overlapping circle layer. Season with salt and pepper and drizzle with remaining 1 T. olive oil.
Return to a 400 degree oven and cook for 20-25 minutes. Remove from the oven and let sit about 3 minutes.
Invert the torta onto a large serving platter and cut into wedges to serve.
