When you use this jutsu, it sends multiple balls of fire at a target. It is also possible to hide shuriken within the fireballs, creating an unexpected secondary surprise attack. For the most part, however, this jutsu is used as a distraction.
So you form the handseals, inhale and focus chakra into your gullet, and then exhale, releasing multiple small fireballs at your target, the wooden dummy. When you release the fireballs throw some shuriken and hide them within the fireballs so not only will the dummy be hit with the fireballs, but with the shuriken as well. Try it out.