Over MEDIUM-LOW heat, saute bacon in 1 tablespoon of olive oil in Dutch Oven until crispy. Remove, using a slotted spoon, and place on paper towels to absorb excess oil.
Dry off beef chunks with paper towels to remove any moisture. This will help the browning process.
Saute beef chunks in the bacon fat and olive oil remaining in the pan over MEDIUM-HIGH heat. Do not crowd the beef. Brown all sides and remove from pan and set aside. Add additional oil, if needed.
Preheat oven to 450°F.
In the same pan, saute the onions over MEDIUM heat until softened and lightly browned,Set aside with beef. Pour off any excess oil remaining in the pan.
Deglaze the pan with the red wine. Whisk in the beef bouillon, tomato paste, dried thyme, garlic and bay leaf. Bring to a simmer then pour off into another container.
Place onions, beef and bacon back in pot. Dust with the 2 tablespoons of flour and toss. Place in the preheated oven, on a middle rack, uncovered for 4 minutes. Remove from the oven, toss and place back into the oven for 4 more minutes. Remove and lower temperature to 325°F.
Pour wine/broth over top of the beef mixture.Add in the baby carrots. Cover Dutch Oven with lid and bake for 3 hours.
At about halfway through the cooking time, prepare the pearl onions and mushrooms. They can set aside until the finishing steps.