Add the sliced peaches to the instant pot.
Also add brown sugar and lemon juice, mix everything well.
Close the instant pot with lid in sealing position and cook in high pressure for 15 minutes.
Once the cooking is done, the pot will beep and wait for a natural pressure release.
Once the pressure is all released, carefully and slowly open the lid.
Mash the contents using a potato masher (if you want a very smooth consistency for the peach butter you may also use an immersion blender to puree the contents now or you can wait until the contents are cooled enough so you can run it through a blender).
Add the vanilla extract, cinnamon powder and nutmeg powder also, mix well.
Simmer the contents (using saute function) for about 20 minutes, while you continue to stir and mash (its important to stir the contents so it won;t burn at the bottom of the pot).
Once the butter consistency is almost reached, also add the real dairy butter (optional, this is just for flavor), mix well and simmer for another couple of minutes.
Allow the peach butter to cool down, then transfer it to clean, dry and air tight glass jars and store in refrigerator for a couple of weeks time. You can easily spread this on your toast or enjoy with waffles, pancakes etc or you may stir this into yogurt, ice creams etc as you wish.