Dockerizing .NET Core Web Api

I'm trying to dockerize .NET Core 2.x web api application for the first time. Here are my files:

Dockerfile

FROM mcr.microsoft.com/dotnet/core/sdk:2.1 AS build-env

WORKDIR /app

COPY *.csproj ./
RUN dotnet restore

COPY . ./
RUN dotnet publish -c Release -o out
RUN dotnet ef database update

FROM mcr.microsoft.com/dotnet/core/aspnet:2.1
WORKDIR /app
COPY --from=build-env /app/out .
ENTRYPOINT ["dotnet", "docker-webapi.dll"]

docker-compose.yml

version: "3.7"

# define all containers we want to use
services:
  db:
    image: mcr.microsoft.com/mssql/server:2017-latest
    # define the credentials to be used in our web application
    environment: 
        ACCEPT_EULA: 'Y'
        SA_PASSWORD: 'sa12345$'
    ports:
        - '1433:1433'
  web:
    build:
        context: .
        dockerfile: Dockerfile
    image: docker-webapi
    depends_on: 
        - db
    ports:
        - '3000:3000'

appsettings.json

{
    "ConnectionStrings": {
        "DefaultConnection": "User ID=sa;password=sa12345$;server=db;Database=master"
    },
    "Logging": {
        "LogLevel": {
            "Default": "Warning"
        }
    },
    "AllowedHosts": "*"
}

From Startup.cs

public void ConfigureServices(IServiceCollection services)
{
        services.AddDbContext<AppDbContext>(options => options.UseSqlServer(Configuration.GetConnectionString("DefaultConnection")));
        services.AddMvc().SetCompatibilityVersion(CompatibilityVersion.Version_2_1);

        services.AddScoped<IEmployeeService, EmployeeService>();
}

Whenever I try to build, using any of the following commands:

docker-compose build .
or
docker build -t docker-webapi .

I get the error:

System.Data.SqlClient.SqlException (0x80131904): A network-related or instance-specific error occurred while establishing a connection to SQL Server. 
The server was not found or was not accessible. Verify that the instance name is correct and that SQL Server is configured to allow remote connections. 
(provider: TCP Provider, error: 35 - An internal exception was caught) ---> 
System.Net.Internals.SocketExceptionFactory+ExtendedSocketException (00000005, 6): No such device or address

What am I doing wrong here?