Summary: Domain decomposition techniques provide a powerful tool for the numerical approximation of partial differential equations. We introduce a new algorithm for the numerical solution of a nonlinear contact problem with Coulomb friction between linear elastic bodies. The discretization of the nonlinear problem is based on mortar techniques. We use a dual basis Lagrange multiplier space for the coupling of the different bodies. The boundary data transfer at the contact zone is essential for the algorithm. It is realized by a scaled mass matrix which results from the mortar discretization on non-matching triangulations. We apply a nonlinear block Gauss-Seidel method as iterative solver which can be interpreted as a Dirichlet-Neumann algorithm for the nonlinear problem. In each iteration step, we have to solve a linear Neumann problem and a nonlinear Signorini problem. The solution of the Signorini problem is realized in terms of monotone multigrid methods. Numerical results illustrate the performance of our approach in 2D and 3D.