Cut the baguette into 1-inch pieces and transfer to a large mixing bowl. Add in the white chocolate and dried cherries. In a separate mixing bowl, mix together the sugar, cinnamon and nutmeg. Set aside about ¼ cup of this mixture for later.

Add to the sugar mixture the eggs, cream, milk and vanilla, and mix thoroughly. Pour the custard over the bread, and mix. Transfer to a large baking pan. Sprinkle with the remaining sugar mixture, evenly place the butter slices on top, and bake at 325 degrees until golden brown, approximately 45 to 55 minutes. Remove from the oven, spread cherry jelly evenly on top, and serve.