Melt the butter and olive oil over medium heat in a Dutch Oven or large heavy-bottomed pot. Add the chopped onion, carrot, and celery. Stir to combine. Cook for 10 minutes until softened, stirring occasionally. Then add the minced garlic, stir to combine, and cook another 2 minutes.
Add the ground beef and sausage. I used a potato masher to mash the meats together and break into smaller pieces. Season with 1/2 tsp of salt and 1/4 tsp black pepper. Cook for a few minutes, but don't brown the meat at this point.
Pour in the milk, 1/4 tsp nutmeg, and the 2 bay leaves. Simmer for about 20 minutes or until the liquid is almost evaporated.
Pour in the wine and simmer for about 5 minutes or until almost evaporated. Add the tomato paste, can of whole peeled tomatoes, and water. Use a wooden spoon to break the whole tomatoes into smaller pieces. Stir in the dried basil, dried oregano, and 1/2 tsp salt, and 1/4 tsp black pepper.
Reduce the heat to low. Cook the sauce, with the lid ajar, for about 2 hours. The sauce will have an occasional bubble, but should not be simmering or boiling. Add an additional splash of water if the liquid is evaporating too quickly. After 2 hours, skim away any fat from the surface. Season to taste with salt and pepper.