Place potatoes in a large saucepan and cover with water. Bring to a boil. Reduce heat; cover and simmer for 10-15 minutes or until tender. Drain; cool for 15 minutes.
In a large bowl, combine the red pepper, onion, carrot and potatoes.
In a small bowl, whisk the mayonnaise, oil, vinegar, mustard, mustard seed, 2 teaspoons dill, sugar, salt and pepper. Pour over potato mixture; gently toss to coat. Sprinkle with remaining dill. Refrigerate until serving.