Duncan (the King of Scotland), his two sons (Malcolm and Donalbain), and Lennox (a Scottish nobleman) gather together with their attendants at a military camp in Scotland. (Check out this nifty map of major locations in the play.)
King Duncan's forces have been busy fighting against the King of Norway and the traitor, Macdonwald.
A wounded Captain arrives, fresh from the field, where he fought to help Duncan's son, Malcolm, escape capture. The group asks the bleeding man for more news from the battle.
The Captain reports that the battle wasn't looking so good – Macdonwald's forces kept arriving from Ireland and the Western Isles – until brave Macbeth fought through the "swarm" of enemy soldiers and disemboweled the traitorous Macdonwald.
There's some hemming and hawing about Macbeth's great courage in the face of seemingly impossible adversity and the Captain continues his story: after Macbeth spilled Macdonwald's guts all over the ground, the battle flared up again when the "Norwegian Lord" brought new men to the field, but even this didn't daunt Macbeth and Banquo, who just redoubled their efforts.
Then the Captain announces he's feeling faint from all the blood he's lost so he needs to see a surgeon, ASAP.
The Thane of Ross arrives and announces he's just come from Fife, where the Scottish traitor, the Thane of Cawdor, has been fighting against Scotland along side the King of Norway. It turns out that Macbeth kicked serious butt here too. Sweno, Norway's king, is not allowed to bury his men until he hands over ten thousand dollars to the Scots.
Duncan then proclaims the traitorous Thane of Cawdor will be executed, and Macbeth, responsible for the victory, shall have his title.