Fry the bacon in a skillet over medium heat until crisp. Transfer to paper towels to drain. Drain the fat from the skillet.
Cook the beef in the skillet over medium heat, breaking it up into small pieces. When it is no longer pink, use a slotted spoon to transfer it to a plate.
Add the onion to the pan and cook for 5 minutes, or until soft.
Stir in the sugar, flour, salt, dill, thyme, parsley, garlic, onion powder, and pepper. Cook, stirring, for about 2 minutes, or until the flour starts to brown. Add the water and vinegar and simmer for 2 to 3 minutes, stirring to make a smooth sauce. Crumble the bacon into the sauce and add the cooked beef. Add the potatoes and stir gently to coat with sauce.
Pour into a serving dish and sprinkle with cheese.
VARIATION: To reduce the fat in this dish, use turkey bacon. Add 2 teaspoons olive oil to the pan before cooking the onion. Use grated Parmesan cheese instead of Cheddar, or omit the cheese altogether.