Slice the bacon up into small pieces and fry it over medium/high heat until it is the crispiness that you desire. When finished drain on a paper towel.
While the bacon is cooking mix the flour, sugar, baking powder and salt into a bowl.
In a separate bowl mix the dairy, egg, oil and vanilla.
Pour the wet ingredients into the dry ingredients and stir just until incorporated.
We are going to cook the pancakes in the same pan that we used for the bacon. Bacon fat is the best, of course, you all ready know that. If there is a layer of grease on the pan pour it out into a bowl. Then pour back about 1 tablespoon of the grease back onto the pan. Over medium heat, pour the pancake batter onto the pan.
Immediately after you pour the batter, sprinkle a hand full of bacon bits onto the pancake. You could mix the bacon directly into the batter, but I have found that you get better distribution if you sprinkle it on this way.
Once you see bubbles forming and bursting on the top of the pancake it is time to flip.
Another minute or two later the pancake is cooked. Remove onto a plate and either eat, or place the plate in the oven on warm to keep the pancakes hot until you are finished cooking all of them.