Sift together flour, sugar, baking powder, and salt.

Whisk milk, egg, melted butter, and vanilla until smooth.

Combine wet and dry ingredients, whisking until creamy.

Cover and let stand while preparing apples.

Peel, core, and slice apples into thin pieces.

Toss apple slices with sugar, cinnamon, nutmeg, and lemon juice.

Melt butter in a skillet.

Sauté apple mixture for 2 minutes.

Add water, cover, and cook for 5 minutes on low heat.

Uncover and boil until juices evaporate, about 2 minutes.

Preheat oven to 150-200°F.

Oil/spray a pan and heat.

Pour a small amount of batter into the pan.

Arrange apple slices on top of the batter.

Pour more batter to cover the apples.

Cook pancake until edges dry and holes appear.

Flip the pancake and cook for another 2 minutes.

Keep warm in the oven.

Dust with vanilla sugar before serving.