At this point in the book, Santiago has beaten the marlin, but is forced to defend it from the sharks that, attracted by the blood, have come to feast on the fish. He kills the first one, and indeed several others, but they come in waves, and he realizes that he cannot hold them off forever. He is destined to lose the fish, the first of any size he has caught in many months. But he is determined not to give up without a fight, and the quote in question captures this sentiment, as does the following paragraph:
It was too good to last, he thought. He took one look at the great fish as he watched the shark close in. It might as well have been a dream, he thought. I cannoth keep him from hitting me, but maybe I can get him.
This mixture of resolve in the face of adversity, physical and otherwise, is one of the dominant themes in The Old Man and the Sea. Even as he knows he cannot prevail against the sharks, which must have been heartbreaking given the circumstances, he still is resolved not to give up.