Grandpa's Tomato Gravy

Ingredients

• 8 slices bacon, cut into 1/2-inch pieces
• 1 large onion, chopped
• 2 (28-ounce) cans diced tomatoes
• 1 (14-ounce) can tomato sauce
• 1 teaspoon granulated sugar
• 1/2 teaspoon ground black pepper
• 1 tablespoon butter
• biscuits, to taste, cooked and warm, sliced, for serving