In a large pot, add 2-3 inches of water and a teaspoon of salt. Wash the potatoes and add them to the pot (the water doesn't need to cover the potatoes).
Bring to a boil over medium high heat, cover the pot and cook for 15 to 20 minutes until the potatoes are tender. Drain the potatoes and set aside to cool.
While the potatoes are cooling, in a large skillet, fry the bacon until crisp. Remove the bacon to a paper towel-lined plate and drain a bit of the grease from the skillet, leaving just a tablespoon or two in the skillet.
Heat the skillet over medium heat and add the onion to the reserved bacon grease, cooking until translucent and slightly golden.
Stir in the flour, sugar, salt, celery seed and black pepper. Cook over low heat, stirring constantly, for 1-2 minutes.
Combine the vinegar and water in a liquid measuring cup and slowly add it to the skillet, whisking constantly so the mixture doesn't get lumpy. Bring the mixture to a simmer, whisking or stirring constantly, and cook for 4-5 minutes until thick and creamy.
Slice or cube the potatoes and add them to a large bowl. Pour the hot dressing over the top and gently stir to combine.
Crumble the bacon over the top and give it another light stir. Top with fresh, chopped parsley, if desired. Serve warm or at room temperature.