German Potato Salad

In a large skillet, fry bacon until crisp; remove and set aside. Drain all but 2-3 tablespoons of drippings; cook onion until tender. Stir in the flour, salt and pepper until blended. Add water and vinegar; cook and stir for 1 minute or until slightly thickened. , Stir in sugar until dissolved. Crumble bacon; gently stir in bacon and potatoes. Heat through, stirring lightly to coat potatoes. Serve warm.