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In voice procedure (the techniques used to facilitate spoken [communication] over two-way radios) a station may request a report on the quality and strength of signal they are broadcasting. In the military of the NATO countries, and other organizations, the signal quality is reported on two scales; the first is for signal strength, and the second for signal clarity. Both these scales range from one to five, where one is the worst and five is the best. The listening station reports these numbers separated with the word "by". Five by five therefore means a signal that has excellent strength and perfect clarity -- the most [understandable] signal possible.

Five by five by extension has come to mean "I understand you perfectly" in situations other than radio [communication], the way Loud and Clear entered slang, post-WW2.

It is sometimes used as slang term to mean "everything is good". The character "Faith" from the "Buffy The Vampire" TV series used it this way.

Sometimes also used in athletic training.

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