Preheat oven to 350º. Grease 12-cup Bundt pan.
Microwave butterscotch chips in small, microwave-safe bowl on Medium-High for 1 minute, stir. Microwave at an additional 10-20 second intervals, stirring until chips are melted and smooth. Cool to room temperature.
In a medium bowl combine flour, sugar, baking powder, cinnamon, salt and nutmeg; set-aside.
In a large bowl whisk together melted chips, pumpkin, vegetable oil, eggs and vanilla. Stir in flour mixture until well combined.
Spoon batter into prepared Bundt pan. Bake for 40-50 minutes, or until wooden pick inserted in center of cake comes out clean. Cool in pan on wire rack for 30 minutes, remove to wire rack to cool completely. If desired, dust cake with powdered sugar.
Heat evaporated milk in medium saucepan over medium heat, just to a boil; remove from heat. Add the butterscotch chips to the evaporated milk, stir until chips are melted and mixture is smooth. Return mixture to heat, stirring constantly, bring mixture just to a boil. Stir before serving.
Slice cake and serve with Butterscotch Sauce.