Place potatoes in a large pot, and fill with salty water, covering potatoes by about 1 inch. Bring to a boil over medium-high heat, and cook until tender, but still hold their shape, 12 to 15 minutes.
Drain potatoes, let sit for 5 minutes until cool enough to handle, and cut each in half. Place in a bowl, and stir in red onion and dill.
Whisk oil and vinegar together in a small bowl and drizzle over potatoes. Sprinkle with sugar, and toss until well coated.
Season with salt and pepper, and serve at room temperature.
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