Melt the butter or margarine in a sauce pan
Add the flour, salt and pepper, mix till well blended.
Add the cream and milk and cook over medium heat, stirring constantly until it begins to thicken
Add the sherry and cook for one more minute.
Add the lobster meat, a dash of nutmeg and a dash of paprika, mix well and remove from heat.
When fish comes out of the oven, (see baked haddock with lobster sauce) pour the lobster sauce over the top of the fish and continue to cook, for an additional 5 minutes.