The system didn't change since the turkish times - the grades go 1 to 5 at elementary and high school level, and 1 to 10 at college level, but there the 1-4 are not used at all.
So, in lower stages:
1 - nedovoljan - insufficient, i.e. fail.
2 - dovoljan - sufficient - i.e. you pass
3 - dobar - good
4 - vrlodobar - very good
5 - odličan - excellent, except when applied to conduct, when it's read as primerno (exemplary).
When something is "za 5" (for five, i.e. deserves a 5) it's excellent. The "za keca" - for ace - means the opposite, of course. The ace has about twenty different nicknames per generation; "kec" is also the ace in playing cards.
At college level the grades have no descriptive names. Traditionally, 1-5 is fail and 6-10 is pass, but the 1-4 exist only in theory; when you fail, it doesn't matter how badly you fail, and most of the professors don't even write that into your index, they just return it to you. You need to be on very bad terms with the professor to have a 5 written into your index; in all other cases it's enough that your presence at an exam doesn't match the list of those who passed - so it's written in college's history but you don't need to carry the indignity further.