In small bowl, combine flour, hazelnuts, nutmeg and salt; set aside. In large bowl, beat butter and sugar with electric mixer until light and fluffy. Add egg and vanilla; mix well. Add flour mixture; mix only until combined. Form dough into 2 disks, about 1 in. thick; wrap in plastic wrap. Refrigerate 2 hours or until firm enough to roll.
Preheat oven to 350°F. Line two cookie sheets with parchment paper.
On floured surface, roll out dough 1/8 in. thick (keep dough in refrigerator until ready to roll). Using square Linzer Cutter, cut half of the dough with 3 in. cutter and place on prepared pan. Cut remaining dough with 3 in. cutter with insert; transfer to second baking sheet. Form scraps into a disk, chill at least 30 minutes and reroll.
Bake 7-9 minutes or until light golden brown. Cool on cookie sheet 2 minutes; remove to cooling grid and cool completely. Tint apple butter with red icing color, if desired. Spread whole cookies with apple butter; if desired, lightly dust cookies with cut-outs with confectioners? sugar and gently sandwich cookies together.