Heat apricots, raisins, and water to boiling in small saucepan. Reduce heat and simmer, covered, until fruit is soft, about 5 minutes. Mash fruit with fork until almost smooth; stir in 1/4 cup sugar and spices (cinnamon and nutmeg); let cool.
To make the pastry, combine flour, sugar, baking powder, and salt in small bowl. Cut in the shortening until mixture resembles coarse crumbs. Mix in combined lemon juice and 3 tablespoons milk, a tablespoon at a time, to form soft dough. Refrigerate until ready to use.
Roll half the pastry on lightly floured surface until 1/8 inch thick. Cut into circles with 3-inch cookie cutter. Place slightly rounded teaspoon of fruit mixture in center of each pastry circle, fold pastries in half and crimp edges with tines of fork. Make slit in top of each pastry with knife.
Bake on greased jelly roll pans at 350 degress F until golden, 12 to 15 minutes. Brush tops of pastries with milk and sprinkle with sugar, return to oven until glazed, 2 to 3 minutes.