gistfile1.rb

one_f, two_f =  File.new("./one.txt", "r"), File.new("two.txt", "r")

while (l_one = one_f.gets)
  while (l_two = two_f.gets)
    puts "#{l_one} -- #{l_two}"
  end
  two_f.rewind # You were missing that!!!!!!
  puts "----------------"
end

[ one_f, two_f ].each {|f| f.close}