Preheat oven to 325 degrees. Cook bacon in a large, oven-proof skillet over medium heat until it starts to release its fat. Reduce heat and add onion and bell pepper.
Sauté until the bacon is cooked and the vegetables are soft. Stir in tomato paste, sugar, molasses, chili powder, mustard, and vinegar until well combined.
Add beans, hot dogs, water, salt and pepper and stir gently to combine.
Cover skillet tightly with a lid or foil and bake for 1 hour.
Remove cover and add more water if needed to moisten beans and continue to bake, uncovered, until top is browned and bubbly, about 30 minutes more. Serve hot.