// Battle Script v1
/sb {
 /set -e %enemy $$1
 /set -e %health $$2
 /say Prepare yourself, $1! | /say Health set to $2
}
/attack {
 /set -e %hit $read(hit.txt)
 /dec -e %health %hit
 if (%health <= 0) {
  %health = DEAD!
  /say Oh, this will be fun, %enemy
 }
 if (%health <= 0) /me $read(finishers.txt, p) %enemy  %health
 else /me $read(weapons.txt) %hit dmg ~ total HP: %health
}
// End Battle Script

That will work.

[edit] If not, make sure you are saving your script in the script editor (file >save) and then load it again. You may only be editing, not saving, and then running from the older version of the script.