Bedford is small-town Midwest dining: diners, pizza, barbecue, and a couple of more ambitious places. Stone Cutter's Restaurant on the square does competent American comfort food and is a favourite of locals for breakfast. Big Dipper on M Street is the old-fashioned ice cream stand the town has gone to for decades.
For something a little more substantial, try Roly Poly on 16th Street for sandwiches, or one of the family-run Mexican places that have sprung up along 16th. There is no fine dining to speak of — for that, drive to Bloomington, forty minutes north.