Cook bacon in a medium skillet over medium-low heat, stirring occasionally, 8 to 10 minutes or until crisp. Remove bacon, and drain on paper towels, reserving drippings in skillet.
Add butter to drippings, and stir until butter melts. Increase heat to medium; add onions, and sauté 10 to 12 minutes or until tender. Add shallots, vinegar, sugar, and kosher salt, and cook, stirring constantly, 1 to 2 minutes or until sugar dissolves.
Reduce heat to low, and cook, stirring occasionally, 20 to 25 minutes or until onions are very tender and brown. Remove from heat; stir in chives, thyme, and bacon. Cool completely (about 20 minutes), or refrigerate in an airtight container up to 3 days.