Thermal stresses as a result from frictional heating must be considered when designing disc brakes. The rotational symmetry of a disc brake makes it possible to model this system using an Eulerian approach instead of a Lagrangian framework. In this paper such an approach is developed. The sliding object is formulated in an Eulerian frame where the convective terms are defined by the sliding velocity. A node-to-node formulation of the contact interface is utilized. The energy balance of the interface is stated by introducing an interfacial temperature. Both frictional power and contact conductance are included in this energy balance. The contact problem is solved by a non-smooth Newton method. By adopting the augmented Lagrangian approach, this is done by rewriting Signorini's contact conditions to a system of semi-smooth equations. The heat transfer in the sliding body is discretized by a Petrov-Galerkin approach, i.e. the numerical difficulties due to the non-symmetric convective matrix appearing in a pure Galerkin discretization is treated by following the streamline-upwind approach. In such manner a stabilization is obtained by adding artificial conduction along the streamlines. For each time step the thermoelastic contact problem is first solved for the temperature field from the previous time step. Then, the heat transfer problem is solved for the corresponding frictional power. In such manner a temperature history is obtained via the trapezoidal rule. In particular the parameter is set such that both the Crank-Nicolson and the Galerkin methods are utilized. The method seems very promising. The method is demonstrated for two-dimensional benchmarks as well as a real disc brake system in three dimension.