Sweeper policy is difficult, not helped by the fact that there's no formal doctrine.
Generally speaking, Sweepers attacks Outlaws. If you name is red, you're an enemy, regardless of your guild affiliations, or even if you're a Sweeper yourself. That being said, the hits that Sweepers like Arms Slave is sent are typically for players who are notorious outlaws, people who have been a real nuisance and need to be brought down a peg.
Of course, it's also obvious that these same Sweepers can also serve as hitmen and assassins by the Erasers, attacking anyone they feel has slighted them in any way. Additionally, not all "Outlaws" remain outlaws in Deep Ground. As I said, those who have been pardoned or died lose their outlaw status, but that doesn't change the fact that some one found their previous activities to be annoying, and the Sweeper will continue to hunt down that outlaw until they no longer need to. Even if you or someone else kills Dunk Master, it's not over with his first death. You have to report his death of course, but the client might not be satisfied with just one death. So you need to keep killing Dunk Master, again and again, until you get orders to stop.
For Rocket Lancer he'll need to report his kills to Arms Slave, since he's the one who doles out orders on who needs to die. Arms Slave will then drop his messages off at dead drops where eventually someone would pick up the message, and then message Arms Slave for the reward for a job well done. Yes, Sweepers do get paid for their services, though some Cleaners (Which Arms Slave is) takes advantage of the self-proclaimed vigilantism of the Sweepers to reap the rewards for themselves while the street level Sweepers (Like Rocket Lancer) would just have to settle for the minor EXP reward they get from the act of killing. Arms Slave doesn't do that though, cause he's not that much of a dick and respects his subordinates.
TL;DR - Forget about Dunk Master you won't find him until later, he's an Outlaw as of right now, go play with everyone else. Being a Sweeper is more complex then I let on.