The dreadnought is the second super ship in the campaign and the second boss. After sinking the rebel fleet in the area you are of course tasked to destroy it. Apon getting near the area it becomes apparent that the signal being received from it is very weak, and that something like water may be interfering with it. As it turns out the interference is coming from the water as Dreadnought is a gigantic submarine!
Dreadnought starts underwater. It will fire torpedos at a slow rate, but in large groups and they are relatively powerful, so intercepting or evading these is a must. It also fires missiles (these might be rockets-verification needed here) which breach from the water and seek the player ship. The only way to damage while submerged is to hit it with anti submarine weapons. Most likely if you are playing through the campaign for the first time you will only have depth charges or depth charge launchers so you will have to get in close while evading it's torpedos at near point blank range. Carriers equipped with planes that have anti submarine weaponry are also a viable option. Using a battleship is not recommended on the first run through the campaign as you will only be able to bring one plane with depth charges and most likely either you or the plane will be destroyed before you can force it to surface. Overall the best type of ship for this fight is the cruiser, with more health than a destroyer to soak up damage but still capable of arming with most anti sub weapons. Once damaged enough (seems to be about 2000 points of damage) it will surface. On the surface of the water it can use its deck guns to attack the player as well as rockets and torpedos. Your own torpedos are a good way to counter it here, though as you can now hit it you can use whatever weaponry you like to sink it.