Gather all ingredients before starting the recipe.
Melt 1 1/2 tbsp unsalted butter in a medium sized saucepan over medium heat. Add 6 whole shallots, chopped and sweat the shallots until they are soft. About 5 minutes under a covered lid on medium heat.
Add 1 tbsp red wine vinegar and deglaze the pan and reduce the vinegar until totally evaporated, about 2-3 minutes with the pan uncovered.
Add 1 1/2 cups Bordeaux or Burgundy wine and reduce the wine by half, skimming occasionally, about 20 minutes on medium heat.
Add 1 sprig thyme2 tbsp smoked bacon and 3/4 cup Demi-Glace and reduce by half. About 20 minutes.
Add 1/4 cup of the remaining wine and 8 leaves from fresh tarragon and bring sauce to a boil. Boil for about 1 minute until the sauce becomes light textured deep colored sauce. Whisk in 1 small teaspoon Dijon mustard.
Strain the sauce into a small saucepan and press the solids in the sieve to extract as much of the vegetables as you can. Scrape the outside of the sieve into the sauce. This will give the sauce a bit more body. Taste and season with kosher salt and freshly ground black pepper.
Add the remaining 1/4 cup of wine, 1 tsp unsalted butter and a couple of tablespoons of water and set aside until ready to use.