Boil potatoes with skin and a little salt until tender.

Cook bacon until crisp, reserving the bacon fat.

Chop the onion and set aside.

Peel the boiled potatoes and slice them.

Add the chopped onion, chopped bacon, and pepper to the sliced potatoes.

In a saucepan, heat half of the reserved bacon fat and butter.

Whisk in the flour until smooth, using a little water to prevent clumping.

Add 1 1/2 cups of water, vinegar, sugar, and salt to the saucepan.

Bring the mixture to a boil, stirring constantly, until it thickens.

Pour the hot dressing over the potatoes and stir gently to combine.

Serve warm.

The potato salad can be prepared ahead and reheated before serving.

Reheat in the microwave until heated through.