Boil unpeeled potatoes until tender. Do not overcook. When cool enough to handle, peel and slice. Set aside.
Fry bacon until crisp. Remove bacon from pan and drain on paper towels. Crumble when cool.
In same fry pan, in bacon grease, saute onions. (You need approx. 1/2 cup bacon grease. Remove extra or add oil to make the 1/2 cup, if needed.) Have flour, sugar, salt, pepper, water and vinegar measured and ready while onions are sauteing. When onions are soft, slowly add flour and stir. Mixture will thicken slightly. Add sugar, salt, pepper, water and vinegar. Stir for another minute or two to thicken again. Pour mixture over sliced potatoes and stir gently. Add the set aside ingredients and fold gently. Serve warm.