Peel and halve or quarter the potatoes. Rinse the potatoes and put in a pan of water to boil. Over medium to high heat bring the water to boil. Reduce the heat to medium but keep a low boil going. Cook until the potatoes until they are fork tender.
Drain the water off the potatoes. Cool. Once cooled, slice into bite sized cubes and place into the larger bowl.
While the potatoes are cooking, mix together the dressing.
In about a 4 cup or larger sized bowl add the mayonnaise, sour cream, onion flakes, dash of pepper, mustard, and sugar. Stir well. Set aside.
Once the potatoes are cooled, add in the dressing, bacon crumbles, and the shredded cheddar cheese. Stir well.
Chill at least 4 hours before serving.