Cook potatoes in their jackets in salted water.
When fork-tender drain, peel, dice.
In the meantime, fry the bacon until crisp.
Remove from pan, add onion, cook until tender.
Drain off all but 1 T. of the bacon fat.
Add flour, sugar, salt and pepper to skillet.
Cook and stir until flour is lightly browned.
Stir in vinegar and water, cook until slightly thickened.
Pour this hot dressing over the warm potatoes, stir gently to blend.