Bring a large pot of unsalted water to boil. Peel russet potatoes and dice into bite-sized pieces. Boil for 10-12 minutes, or until fork-tender. Drain and place in a medium serving bowl. Set aside.
While the potatoes are boiling, slice onion into medium-thick slices. Dice bacon into larger-than-bite-sized pieces.
In a separate bowl, whisk together water, vinegar, sugar, mustard powder and salt.
Heat a pan over medium heat. Cook diced bacon until it reaches your desired degree of doneness- I recommend cooking them a little crispier than you normally would as they will soften some in the dressing. Remove the bacon from the pan and place on a paper-towel lined plate, reserving the grease in the pan. Keep the heat on.
Add flour to the bacon grease and cook for a minute or so, stirring constantly, until you can't smell raw flour anymore. Add the water and vinegar mixture and let simmer until thickened, about 3-4 minutes.
Pour dressing over the potatoes and stir until thoroughly combined. Stir in bacon, reserving some to use as a garnish (if desired). Add pepper to taste and be generous!
Serve warm.