Cook potatoes in boiling water until tender, but not mushy. Remove and let cool until you can handle them.
While potatoes are cooling, make dressing by frying bacon in a skillet. Fry it crispy. Remove to paper towels, reserving bacon grease.
To bacon grease, add salt, pepper, sugar, vinegar and water. Bring to a boil. Reduce heat and simmer 2 minutes.
Peel and slice potatoes. Place 1/3 of them in a large bowl, salt and pepper them and add 1/3 of the celery, 1/3 of the onion and 1/3 of the dressing, and 2 strips of bacon crumbled. Repeat 2x. Once done, stir well, but gently, you don't want to break up the potatoes.
Serve warm or at room temperature. Reheat leftovers before serving.
