Wash and quarter baby red potatoes and place in large pot of boiling water. Cook for 10 to 12 minutes or until fork-tender, taking care not to over cook. Drain and rinse with cold water.
While the potatoes are boiling, fry up 6 to 8 slices of bacon until crispy. Drain on absorbent surface such as a brown paper bag or paper towel. Cool and crumble or chop with a knife.
In small mixing bowl, comb combine sour cream, ranch seasoning, lemon juice and shredded cheddar cheese. Thoroughly combine.
Return potatoes to pot and then pour sour cream mixture over them while gently stirring with a soft spatula. Mix in chives and salt (if desired.) Transfer to serving dish and cool in refrigerator for at leas 1 hour prior to serving.