Finely grate the peeled potatoes and onion into a large bowl using the fine-hole side of a box grater or a food processor with a fine grating attachment.
Transfer the grated mixture to a clean, lint-free kitchen towel. Wring the towel forcefully over a bowl to extract as much liquid as possible from the solids.
Allow the extracted liquid to sit undisturbed for 5 minutes until the white potato starch settles at the bottom of the bowl.
Carefully decant the liquid and discard it, retaining the thick white starch paste remaining at the bottom.
Combine the dry potato-onion mixture with the reserved starch, eggs, flour, salt, pepper, and nutmeg. Stir until a thick, tacky mass forms.
Heat the oil and butter in a heavy-bottomed cast iron or stainless steel skillet over medium-high heat until it shimmering (approx. 180°C / 350°F).
Working in batches, drop 60 ml (1/4 cup) mounds of batter into the hot oil, flattening them immediately with the back of a spoon to a thickness of 1 cm.
Fry for 3 to 5 minutes per side until the edges are deeply golden and the surface is crispy.
Transfer the pancakes to a wire rack set over a baking sheet to drain excess oil without steaming the crust.
Serve immediately while hot, traditionally accompanied by unsweetened applesauce (Apfelmus) or sour cream.