At a military camp, King Duncan of Scotland, his sons Malcolm and Donalbain, and the Thane of Lennox wait for news of the war. A captain enters, covered in so much blood he is almost unrecognizable. The captain tells them of the state of the battle against the invading Norwegians and the Scottish rebels Macdonald and the Thane of Cawdor. Two Scottish nobleman have been especially brave, Macbeth (the Thane of Glamis) and Banquo. Macbeth killed Macdonald ("unseemed him from the nave to th' chops" (1.2.22)).
The blood covering the captain makes him an unrecognizable monster, just as Macbeth, who in this scene is described as a noble hero who is brave and loyal to his king, will be transformed into a monster as he becomes "covered" with the metaphorical blood of those he kills to achieve his ambitions.
The Thane of Ross arrives, and describes how Macbeth defeated Sweno, the Norwegian King, who now begs for a truce. Duncan proclaims that the traitorous Thane of Cawdor shall be put to death, and that Macbeth shall be made Thane of Cawdor.
Duncan rewards and trusts his subjects. This is the opposite of personal ambition. Ironically, though, he replaces one traitor with a much worse traitor.