In a large saucepan, cook bacon until crisp. Remove bacon, and set aside. Drain all but 3 tablespoons bacon fat from the pan.
Brown onions in bacon fat over medium heat.
Add potatoes, and enough water to cover. Cover and cook until potatoes are tender, 15 to 20 minutes.
Stir together soup and milk until smooth; add to potato mixture. Heat, but do not boil. Add salt and pepper to taste, and stir in dill weed. Crumble bacon; stir in just before serving soup, or sprinkle on top to garnish.