A phrase that is used to indicate accuracy. For example, in a machine shop, a lathe that is rotating with no deviation is said to be running "dead nuts". When a surveyor is taking a measurment with a transit or theodolite and the reading is perfect he might comment, " that's dead nuts." Target shooters who have the scopes or sights on their guns aligned properly will be shooting dead nuts if their own aim is true.
The actual origin of the phrase is anyone's guess-timate. Its use has been universal in the tool & die industry, weapons useage, and other trades where accuracy in measurement and specifications is required. Definitions of the word dead include: "absolutely uniform", "unerring" and "exact". Similar phrases with the word dead include "dead on" and "dead certainty".
I have my own theory of where the name may have come from. When a nut or set of nuts is tightened onto a bolt and its snug and tight, they are no longer loose. Hence, there is no longer any play or movement of the nut(s). They are "dead nuts".