Combine sugar, corn starch and orange juice in large saucepan. Add 1 pound blueberries. Bring to a boil over medium-high heat, stirring constantly; boil 1 minute. Stir in remaining 8 ounces of blueberries, orange peel and nutmeg; cook and stir 1 minute longer. Add vanilla. Serve immediately or refrigerate for later use.
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