This line is spoken by Donalbain immediately after it is discovered that King Duncan has been murdered. He and his brother Malcolm are planning to flee to seperate countries because they recognize that someone in that house had killed their father, and would probably want to kill them too. Donalbain recognizes that although everyone at Macbeth's castle seems to be friendly toward them and their father, someone obviously was hiding a 'dagger' behind their 'smile' of friendship.
The quotation is part of the appearance vs. reality motif in Macbeth (and we find this motif in many plays of Shakespeare). We see the motif in the character of Lady Macbeth, for example, who, though she is a woman, desires the heart of a man in order to kill the king; even more, though she behaves with the grace of a lady when called upon to do so, she has already bloodied her hands with a dagger in participating in the death of Duncan. Without a doubt behind this woman's smiles lie daggers. The motif occurs again when she imagines she sees blood on her hands for what she "sees" is only in her mind--once more the truth of the situation not in the appearance but hidden, often metaphorically, behind it (in "seeing" blood she feels her guilt).
This sentence means that there are ulterior motivations under the surface of what-seems-to be. In other words, what appears on one's face may not be the sentiment in one's heart.