From the game package:
How will you do in the line of fire?
Seek and destroy your opponent's ships in this all-out, no holds barred dice duel. Secretly set up your tokens on your battlefield and brace yourself as your opponent attacks. Was it a hit or miss? Fire back and see if you can be the first player to sink all of your opponent's ships, and win!

From Erik Arneson's website:
Players first play tokens (numbered 3 to 11) on each of their five ships, making sure to put them in order from lowest to highest -- although duplicate numbers are allowed. To attack, each player rolls three dice and chooses two. They place those two dice next to a token, and if the total equals the value of the token, a hit is scored. Rolls of 2 and 12 are always hits. Unfortunately, this clever Battleship-based dice game is not very easy to find. Your best bet is to look in drug stores and grocery stores.