Boil potatoes in a large pot for 20-25 minutes or until a fork can easily puncture the potatoes. After the potatoes are ready, drain, cool in the refrigerator, dice into cubes with the skin still on once completely cool.
While potatoes are boiling, hard-boil the eggs for 15-20 minutes in a small saucepan. Once done, drain and cool in fridge. Peel and slice.
While potatoes and eggs are boiling, start the bacon. Place strips on large ungreased skillet. Sprinkle with pepper. Cook until crisp without burning. Once bacon is cool, break into pieces. Save oil and set aside.
Combine relish, dill, half of the paprika, celery seed, salt, pepper, mayo and mustard into a separate dish.
Place the cubed potatoes and sliced eggs into a large serving bowl.
Pour vinegar and bacon oil over the potatoes and eggs and toss gently.
Spoon mayo mixture over potatoes and toss gently until all the potatoes and eggs are covered.
Sprinkle the remaining paprika over the top of the potato salad. Chill for at least 2 hours before serving (if time permits, make ahead of time and chill overnight so the flavors can marry)
Note: If making the night before, wait to add the bacon until the day of serving. Bacon can become soft if left overnight in the salad.
If desired, mix in 1/4 cup of shredded sharp cheddar cheese once the salad is completely cool (do not add in while warm, cheese will melt).