Butterscotch Pumpkin Cake

My neighbor brought this to us after my twins were born, and I'm pretty sure I ate half of the cake myself. I don't have a picture, but trust me, this cake is yummy!

1 bag butterscotch morsels, divided
2 c. flour
1 3/4 c. sugar
1 T. baking powder
1 1/2 t. cinnamon
1 t. salt
1/2 t. ground nutmeg
1 c. canned pumpkin
1/2 c. vegetable oil
3 eggs
1 t. vanilla

Combine flour, sugar, baking powder, cinnamon, salt and nutmeg in a medium bowl; set aside. Stir together pumpkin, oil, eggs and vanilla in a large bowl with a wire whisk; set aside. Microwave 1 c. butterscotch morsels on high for one minute; stir until melted. (Continue to microwave in 15-second intervals if necessary.) Add melted morsels to pumpkin mixture and stir until smooth. Stir in flour mixture. Spoon into greased bundt pan; bake at 350* for 40 - 45 minutes. Cool on a wire rack for 30 minutes; remove cake from pan and cool completely. Dust with powdered sugar and serve with butterscotch sauce.

Butterscotch Sauce:

1/3 c. evaporated milk

Remaining butterscotch morsels

Heat evaporated milk over medium-high heat just to boiling; remove from heat. Add morsels; stir until smooth. Return to heat and bring mixture just to boiling, stirring constantly. Cool to room temperature; stir before serving.