Quarter the red potatoes.

Boil the potatoes until tender.

Cut bacon into 1-inch pieces.

Cook bacon in a sauté pan until crispy.

Drain most of the bacon grease, leaving a couple of tablespoons.

Add 1 cup of water, white vinegar, and sugar to the pan with the bacon.

Simmer on low heat, adjusting sugar to taste for desired sweetness.

Add salt and pepper to taste.

Bring the sauce to a boil.

In a small bowl, mix 1 cup of cold water with cornstarch until smooth.

Re-stir the cornstarch mixture.

Slowly pour the cornstarch mixture into the hot sauce while whisking constantly to avoid lumps.

Continue adding cornstarch until the sauce thickens to the consistency of a thin gravy.

Remove the sauce from heat.

Add the warm potatoes to the sauce a little at a time, gently tossing to coat.

Add sliced chives and mix.

Serve immediately while hot or refrigerate and serve cold.