Boil potatoes in their skins until tender. Refrigerate until cold, or overnight. Peel and cube potatoes.
Fry bacon strips until crisp. Reserve 1/3 cup bacon fat in the skillet; add onion and cook until yellow.
Mix in flour, sugar, salt, poppy seed, and pepper. Stir in water and vinegar gradually. Cook, stirring until mixture boils. Boil for 1 minute.
Pour over potatoes. Add the bacon , broken into pieces (save some for garnish). Cover and let stand until ready to serve. Heat over hot water.
Serve in large bowl garnished with bacon pieces, minced parsley or chives. Makes 6 servings.
Variation: Substitute Celery Seed for Poppy Seeds