Dips are a great exercise for overall chest development with the primary focus being the lower pectoral muscles. Secondary muscles used are the upper and mid pectorals, triceps and delts.
You can add extra weight to your body once you become use to this exercise as your body weight may not provide you with sufficient resistance after a while.
To correctly perform dips and target your chest you need to direct the overload on your chest and away from your triceps as much as possible. This is done by leaning into the exercise and dipping at an angle. Dip down slow and in a control manner getting a good stretch down the bottom of the exercise and power back up forcefully repeating the process.