One war machine or Hellcannon that is within 3" of the Deamonsmith can use his BS or re-roll one artillery dice or scatter dice during each Shooting phase. You must nominate which weapon, if any, will be using this rule at the start of each Shooting phase, before any such weapons within 3" of the Daemonsmith are fired.
A Deamonsmith that is within 3" of a war machine is allowed to take a "Look Out Sir!" roll just as if he was within 3" of a unit of five or more models of the same troop type as himself. If the roll is successful, the hit is resolved instead against the nearest friendly war machine.