1. Cook potatoes in 1 quart lightly salted water until tender but firm, 15 to 20 minutes. Drain. When the potatoes are cool enough to handle, cut potatoes in half or quarters, depending on size. Place potatoes in large bowl.
2. Meanwhile, saute bacon in medium-size skillet until slightly crisp. With slotted spoon, transfer bacon to paper toweling to drain. Saute onion in bacon drippings until softened, about 3 minutes. Add honey and cider; cook over medium heat for 2 minutes. Stir in cornstarch mixture. Bring to boiling; cook, stirring, until thickened, for about 2 minutes. Remove from heat. Crumble bacon; stir into dressing along with dill. Remove from heat.
3. Chop watercress into bite-size pieces; add to potatoes in bowl. Pour warm dressing over; gently toss. Serve immediately. Makes 6 servings.