Start with a group of people; friends, strangers, girls, guys, couples, or mixed.
Form a circle. (it helps to have one person clearly on your right or left)

One person begins by asking someone else "Truth or Dare?".
The other person should respond with "Truth" or "Dare" (or "Your Choice").
If it's "Truth", the person who started can ask that person any question,
and they must respond honestly. (joking answers don't count).
If it's "Dare", the person who started will command the other to perform a dare.

Dares can range from silly, to embarrassing, to sexual. (and must of course be
physically possible) But should never be dangerous, illegal, or threatening.
If the other players agree a dare is too harsh, then that person has the right
to refuse without penalty. However, if the person refuses to do a dare simply
because of embarrassment, some penalty should be imposed.
This may be banishment from the room for the remainder of the game,
or some other pre-determined act that everyone has agreed on.

Once the person has answered the question truthfully, or performed the dare,
it is now his or her turn to choose somebody and ask "Truth or Dare?". 

A popular variation on this, is to write down all the potential questions and
dares before the game begins. The thing that makes this fun is that the inventive
person always runs the risk of getting a dare they thought up. Put them each
into a bag or bowl. And now, rather than asking eachother, players simply
reach in and blindly pull out a random question or dare. This is a good way
to avoid long pauses while players try to think up questions or build up the
courage to ask a particularly devious dare.

Tips:
- You may want to agree to a time limit for all Dares (eg. 1 minute),
to keep the game moving and especially if you want to avoid dares
for extended sexual encounters (which might end the game quickly).
- You may also want to restrict all Dares to the present game location.
Daring somebody to walk down the block naked might get you busted,
and end the game. And daring somebody to do something at a later
time or place isn't very inclusive for everyone else participating
- It is usually a good rule to not allow people to suggest Dares
that involve themselves. Or else you may end up with one person
requesting sexual favors for themselves (over and over again).