At the beginning of the story, the protagonist, a Republican sniper, is positioned on a rooftop, waiting for a chance to kill his enemies. "Dublin lay enveloped in darkness," save for the "dim light of the moon." After the sniper finishes eating a sandwich, he decides that he wants to smoke a cigarette. He thinks, however, that it might perhaps be too risky—too "dangerous"—to smoke a cigarette. He reasons that the spark of the match "might be seen in the darkness." If one of his enemies sees the flash, they may become suspicious. They would be able to flee or even shoot at the sniper. This seems like a reasonable assessment of the risks.
Despite these risks, however, the sniper decides nonetheless to go ahead and light his cigarette, putting his own life at risk. As soon as he starts smoking the cigarette, a bullet flies past him. The implication is that his fears were of course well-founded and that somebody, one of his enemies, saw the light, guessed that it indicated the presence of the sniper, and shot. The sniper takes "another whiff" of his cigarette, swears to himself, and then moves from his original position on the rooftop. Moments later another bullet flies past him.
It is strange that the sniper decides to take the risk of lighting a cigarette and giving away his position to his enemies. Perhaps he is overconfident, or perhaps he is naive.