Located a mile east of Grace City in Larrabee Township, section 13-23-24, this lake or large slough was first named by the Larrabee family when they lived in the area. The story is that the family lived along the James River where they kept a herd of cattle. On one occasion a blue roan cow strayed away and was missing for some time. She was finally located on the "Blue" lake with a newborn calf. The Larrabee's after that called the body of water the "Blue Cow Lake".
Someone in recent times saw fit to change the name to a more ritzy name of Blue Cloud. (Dana Wright)
Source: A History of Foster County 1983 Page 16