Place bacon in large heavy saucepan. Brown well; remove, leaving drippings.
Cut fish filets into 1″ pieces.
Place layers of potato, onion and fish in saucepan. Add water. Cover. Bring to a boil, reduce heat; simmer 10 to 15 minutes, until potatoes and fish are just cooked.
Add milk, seasonings, butter and bacon. Keep warm over low heat.