Preheat oven to 400 degrees. Butter a 9 by 13 inch baking dish.Melt butter in a small saucepan over medium-low heat. Once bubbling, add the flour. Cook for 1 minute, stirring constantly. Slowly pour in the milk and continue cooking and stirring until smooth and thickened - about 5 minutes. Reduce heat if mixture begins to boil. Remove from heat and stir in the salt, pepper, nutmeg, and 1 cup of the shredded cheese. To toast the bread, place on baking sheet and bake 7-8 minutes, until crisp.Arrange half the toasted bread in the prepared baking dish. Spread with a thin layer of Dijon, arrange sliced ham over top, sprinkle with half the remaining shredded cheese, and top with remaining toasted bread. Pour cheese sauce over the sandwiches and sprinkle with the remaining shredded cheese. Bake for 10 minutes, then broil for 3-5, until tops are browned and bubbly.