"Jones’s ship, the Bonhomme Richard, and two other ships had been sailing in the North Sea, looking for British ships to raid, when they came upon a large merchant convoy protected by two British ships. While the convoy escaped, the British ships began to fight, and one of them, the Serapis, ended up fighting one-on-one with the Bonhomme Richard.

The two ships began firing broadsides at each other, but on the second round, two of Jones’s heaviest guns exploded, killing their gun crews and decreasing the ship’s firepower. After fighting a losing battle for a while, Jones tried to grapple the Serapis but failed, so the Serapis tried to rake the Bonhomme Richard but ended up getting its rigging tangled with the other ship’s bowsprit. When the captain of the Serapis called over to ask Jones if he was ready to surrender, Jones replied, “I have not yet begun to fight!”

After the ships got untangled, Bonhomme Richard tried to rake the Serapis, but the two ships only got tangled again, and soon they were stuck floating side by side. The Serapis began firing right into the Bonhomme Richard’s hull, and it looked like the battle would soon be over for Jones.

But with the two ships in such close quarters, Jones ordered his men in the rigging to begin shooting the sailors on the Serapis’s deck. According to the most common version of the story, one of Jones’s men managed to drop a grenade down a hatch to the lower deck of the Serapis, causing some improperly stored powder to explode and putting most of the lower gun deck out of commission. Realizing that his ship couldn’t escape (due to a heavily damaged mainmast), let alone fight any more, the captain of the Serapis surrendered."

(source: http://spotlights.fold3.com/2013/06/24/the-battle-of-flamborough-head/)

John Paul Jones