Place potatoes and 1 teaspoon salt in large pot and cover with cool water. Bring to boil over high heat and cook until potatoes are fork-tender. Drain potatoes into colander and set aside.
Meanwhile, cook the bacon, either 2-3 minutes per side in a pan over medium-high, working in batches, or for 10-15 minutes in a 425º oven on a foil-lined baking sheet until crispy. Place on paper towel-lined plate to cool. Once cool, roughly chop.
In large serving bowl, mix yogurt, mayonnaise, mustard, dill, lemon and spices, including remaining teaspoon salt. Add shallot and bacon, then taste and add more salt or pepper if desired.
Add potatoes and stir to coat. Taste again and adjust seasonings if needed. This is best made a day ahead, to give the flavors time to marry.