In a large pot, cover potatoes with an inch of cold water. Bring to boil, salt water and cook to tender. Drain and return them to hot pot to dry the potatoes off.
Meanwhile, place shallots in bowl and season with salt, pepper and sugar, cover with vinegar and let stand a few minutes. Add mustard and whisk in oil. Adjust seasonings to taste. Toss potatoes with dressing, celery and dill.