Heat oven to 350 degrees F and melt butter over saucepan or microwave. In a 10-14 inch circular baking dish, use some of the butter to pre-grease the pan.
Make the malhabaya (pudding): In a medium saucepan (NO HEAT YET), combine the whole milk, half and half, sugar and cornstarch and mix until there are no more clumps. Heat up the sauce pan on medium heat. Once the pudding starts to bubble and get thicker, remove from heat and let it cool. You can even set the cooled pudding in the fridge for the next day.
Add sugar, water and lemon juice into a another saucepan and heat on medium heat for 10-15mins. Make sure the consistency is more on the liquid side so that it seeps through the kunafa.
Remove from heat and let it cool down. If you find that it is too thick, you can heat it up and add more water to it.
Shred the dough into smaller strips with a food processor or by hand shredding. You want it to be no more than one inch pieces. Make sure you do this quickly because it can dry out. Add melted butter to the phyllo dough if it starts to get dry. Once you shred all of the kunafa dough, add all of the melted butter on it and massage it through the dough. Using prayer hands, make sure it coats every single piece of kunafa shred.
Place half of the kunafa, using your hand to flatten it on the pan. You can use a plate or cup to assist with the flattening process. Cover every part of the pan. You can even add it to the edge so it's easier to cover the top half of the kunafa.
Next, add the cooled down pudding to the kunafa and spread it out. Make sure not to go all the way to the edge or the pudding may spill out. If you refrigerated this, you can cut the pieces of pudding and it makes for an easy spreadable layer.
Add another layer of kunafa dough mix to the top by gently pressing the shredded dough above the pudding. Make sure all the pudding is covered an none is spilling out.
Add kunafa to the bottom rack of the oven for 30 mins and then put on the top rack for another 10 mins or until golden brown.
Take the kunafa out of the oven, let it cool for 5 mins and pour over the liquid syrup to your desired sweetness.
Flip it over on a tray. Add more liquid syrup if you want more sweetness. Add nuts for garnish if you like! Serve!