Creating Apple Bread Pudding is an enjoyable process that can easily be followed with these steps:

1. Preheat the Oven: Preheat your oven to 350°F (175°C) and lightly grease a 9×13-inch baking dish with butter.
2. Prepare the Bread: If using stale bread, cut it into cubes and let it sit out for about 30 minutes to dry out further. Fresh bread can be used but may require slightly less milk.
3. Mix the Apples: In a large bowl, combine the diced apples with 1 teaspoon of cinnamon. Set aside.
4. Whisk Wet Ingredients: In another bowl, whisk together the eggs, milk, sugar, vanilla extract, remaining cinnamon, nutmeg, and salt until well blended.
5. Combine Ingredients: In the greased baking dish, layer the bread cubes evenly across the bottom. Sprinkle the apple mixture over the bread. If using, add raisins or nuts at this stage.
6. Pour Custard Mixture: Slowly pour the egg and milk mixture over the bread and apple layers, ensuring everything is evenly soaked. Press down lightly to help the bread absorb the liquid.
7. Bake: Place the baking dish in the preheated oven and bake for 30-45 minutes, or until the top is golden brown and a knife inserted in the center comes out clean.
8. Cool: Once baked, remove from the oven and allow it to cool for about 15 minutes before serving. This will help the pudding set a little more.
9. Serve: Cut into squares and serve warm, optionally drizzled with caramel sauce or a scoop of vanilla ice cream.

These steps will guide you in creating this incredible dish with ease!