Cut potatoes into 1/2- to 3/4-inch cubes and put them into a medium saucepan. (Leave skins on.) Add enough water to cover the tops of the potato cubes. Cover and boil about 15 minutes, or until tender but still firm.
While potatoes are cooking:
Cook bacon until crisp, remove from pan and set aside, reserving bacon drippings.
Saute the onion in the reserved bacon drippings.
Turn the heat on the sauteed red onions down to medium low, and add vinegar, sugar, water and celery seed. Heat to a simmer and pour over hot potatoes. Make sure liquid and potatoes and both very hot when mixed together. Add cooked bacon pieces. Stir to combine.
Salt and pepper to taste, and then put into 2 1/2 qt. casserole dish.
Bake uncovered for 30 minutes at 325°.
German Potato Salad is always better the second day! Prepare it ahead of time and simply reheat (or serve cold) when you're ready to serve it.Ingredient Notes: VINEGAR: Plain vinegar works just fine too.Vegetarian adaptation:Omit bacon. (Duh.) Saute onions in 3 tablespoons of olive oil, and then proceed as directed. Sprinkle with 1/4 cup vegetarian bacon bits at the end. Honestly though, some things just aren't meant to be adapted for vegetarians, and Hot German Potato Salad may just very well be one of them.
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