Fry bacon til crisp, then cook onion in bacon drippings.
Peel potatoes and cut intp bite-sized pieces.( Also good with skin left on)
Crumble bacon over potatoes.
Heat bacon drippings, onion, vinegar, sugar,water and celery seed til boiling and pour over hot potatoes. Make sure liquid and potatoes are very hot when mixed together. Mix well. Add salt & pepper to taste, put in 2 and 1/2 quart casserole and bake, uncovered at 300 degrees for 30 minutes.
You can prepare this ahead and refrigerate, as it does taste better the second day. Just be sure to serve it hot!