list of posts from category in wp_nav_menu

I’m using custom expanding menus from the built in editor for different sections of my site. I need to be able to drag the category into the menu and list posts from it alphabetically, not just the category name (that links to an archive page).

Example menu structure:
-Home
-News
-People (expands)
–Person 1
–Person 2
-Papers
-Category (expands)
–Post 1
–Post 2

I’d like to keep it as a custom menu, as I’ve added the css and js to style the active items and keep the expanding menu open depending on what page your on. I hoped to be able to add a custom link (for the category name with a link to “#” for the expander) then just drag the category below it (used to generate the nested ul).

I know I could just add the custom link, then add the posts manually, but the lists can get long and manually alphabetizing them isn’t appealing.