Put muffin tin in preheated oven until butter melts. Set aside.
Beat milk, eggs, 1/4 cup sugar, vanilla, and nutmeg together in a large bowl.
Whisk flour into the milk mixture until you have a batter. Divide batter between muffin cups. Drop even amounts of blueberries into each batter portion.
Stir 1 T. sugar and cinnamon together in a small bowl; sprinkle evenly over batter portions.
Bake in preheated oven for 5 minutes. Reduce heat to 350 F. and continue baking until popovers are no longer moist in center, about 25 minutes.
Dust tops of popovers with confectioners' sugar. Squeeze lemon juice over popovers. Serve warm.