In a medium size frying pan, bring sherry to a gentle boil. Stir the dried dates, walnuts, lemon zest and nutmeg into it. Cook until sherry has boiled down (reduce the mixture). Immediately add milk and set in the fridge. Chill 1/2 hour.

Preheat oven to 350 degrees F (175 degrees C). Lightly grease cookie sheets.

In a medium size bowl, mix flour, pancake mix, baking powder, 1/2 cup confectioner's sugar, brown sugar and salt together. Using an electric mixer, combine the flour mixture, the applesauce, milk and almond extract.

Cream the margarine and egg, and pour the creamed mixture into the batter. Continue to mix until the mixture is light and fluffy. Fold in the date mixture. Roll the dough into 1 1/2 inch balls and place on a lightly greased cookie sheet.

Bake for 17 minutes, until the edges are light brown and crispy. Immediately sprinkle confectioner's sugar over the warm cookies. Cool and serve. These cookies freeze well.