When MCB sees a dagger before him it is not an actual dagger but one from his imagination / subconscious. He is hallucinating.
“Is this a dagger I see before me?”
  • the darkness of his thoughts / mind are beginning to take over.
  • The darkness of his subconscious that he has been trying to suppress are coming to the surface and consuming his mind.
“with the handle towards me?”
  • his mind is offering him the dagger
    • with the handle facing him, this is an advance not an attack, his subconscious is offering it to him.
  • By accepting the imaginary weapon he accepts the responsibility for the murder. He alone is now responsible of his actions.
The knife in his mind is covered in blood.
  • This means that, in MCB’s mind, he has already committed the act.
By the end of the soliloquy, MCB has made up his mind to murder Duncan. He is dead-set (pun intended) on murder and, thus, sets things into motion that cannot be undone.