Preheat the oven to 400 degrees F.
In a large, heavy saucepan, melt the butter. Turn temperature to medium high and add the onions, sauté until golden, about 8 minutes.
Add the garlic, bay leaves, nutmeg, 1 tablespoon salt, and 3/4 teaspoon freshly ground pepper, stir well and cook for 1 minute, then add the cream and milk and bring to a boil. Remove saucepan from the heat, cover, and set stand for 5 minutes.
In a medium-sized bowl, toss the Parmesan together with the dry bread crumbs, olive oil, 1/4 teaspoon salt, and 1/4 teaspoon freshly ground pepper.
Locate the bay leaves in the onion mixture and remove them.
In a large bowl, gently toss together the sliced potatoes and onion mixture.
Spread half of the potato mixture in the bottom of a pan-sprayed (I use an olive oil mister) 2-quart baking dish, then sprinkle 2/3 cup of the bread crumb mixture over the top. Spread the remaining potato mixture over, pressing down firmly to pack them down, then cover with remaining bread crumbs.
Bake at 400 degrees F for about 1 hour, or until the potatoes are tender and the top is a nice, golden brown (if the potatoes brown too quickly, loosely cover the baking dish with foil).
Note: These can be baked up to 5 hours ahead of serving time then reheated in the oven (preferably, although doing it in the microwave would work in a pinch but the topping won't be crisp if you do so).