The term is Spanish and literally means "Hand to Hand" as in unarmed combat. However in its modern incarnation the term is used in any scenario where two (usually male) individuals are going to have some sort of competition. Eg Darts, Snooker, an actual fight, even videogames. It is rarely a serious threat.
"Come Hotshot think you can take me at Multiplayer goldeneye? Huh? Ok just you and me Mano a Mano"