When I hear this expression, I think of two possible metaphors:
Two cars are drag racing on a dirt road. Carl's Camaro is much faster than Mary's Miata. The Camaro quickly gets ahead of the Miata. Both cars "kick up" dust. Mary's Miata is literally in a dust cloud that Carl's Camaro "kicked up". The Miata is figuratively "eating" the Camaro's dust. In other words, the Camaro "dusts" the Miata.
The dust metaphor can be stretched a bit to "smoke": Either the Camaro is burning a little oil, or Carl smokes cigarettes, or Carl spins his tires (causing the tires to give off smoke). In other words, Carl's car "smokes" Mary's car.
Two chips are racing to complete a task. The i486 is much faster than the i286. You could "overclock" the i286 to make it go faster, but the i286 might overheat. If you overclocked the i286 enough to keep up, the i286 might literally burn up -- it would literally start to smoke. Even if you did not try to destroy the i286, the huge difference in the test performance could be metaphorically described as "The i486 smoked the i286."