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Macbeth's vision of a dagger hovering in the air suggests at the outset of the soliloquy that he is at the very edge of sanity, the extreme stress of his violent thoughts and internal conflict causing him to hallucinate. He apostrophizes the dagger, questions it, asks if it is real and, even when he seems to realize that it is not, still sees it as clearly as the real dagger in his hand. Macbeth describes his brain as "heat-oppressed," a striking image for the pressure and turmoil he experiences. Even after questioning the dagger and considering that it may be "a false creation," he still cannot quite decide:

Mine eyes are made the fools o' the other senses,
Or else worth all the rest;

This emphasizes his ambivalence about the murder. Perhaps he should trust his eyes and follow the dagger after all. In fact, he does so even after deciding "there's no such thing."

However, instead of proceeding to the task in hand, Macbeth falls to meditating on the powers of darkness and the various terrible things that happen at night. His thoughts are disordered: witchcraft, Hecate, the wolf who moves like Tarquin who, in his turn, moves like a ghost ... At length Macbeth seems to realize that he is both procrastinating and rambling, saying:

Whiles I threat, he lives:
Words to the heat of deeds too cold breath gives.

This is a renewal of his resolution at the end of I.vii, when he said to Lady Macbeth:

I am settled, and bend up
Each corporal agent to this terrible feat.

His mental anguish and fevered hallucinations in II.i show that this was not a final declaration. He has to keep on steeling himself for the task.

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We know that Macbeth really doesn't want to commit this murder, because he tells this to Lady Macbeth a few scenes prior. He lists all the reasons he has not to kill Duncan, along with the one and only reason he has to do it: ambition. Now, Macbeth admits at the end of this soliloquy that his resolve to go forward with Duncan's murder grows colder the longer he hesitates. His hallucination of the murder weapon, especially when he looks away and back again to find it covered in "gouts of blood," seems to indicate the guilt he already feels about committing this act.  Blood is going to be a major motif of the play, especially one's inability to wash one's hands clean of blood in the figurative sense, and it connects to guilt as well. It seems like Macbeth's own brain is giving him one more warning, one last chance to stop himself before he goes down this terrible path.

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Macbeth's dagger soliloquy in Act II scene i of Macbeth shows his state of mind to be one in which his hold on rationality has abandoned him. The first line reveals that Macbeth is having an hallucination: he sees a dagger that he cannot grasp:

Is this a dagger which I see before me, 
The handle toward my hand? Come, let me clutch thee.
I have thee not, and yet I see thee still.

The first fifteen lines elaborate upon the hallucination. Macbeth directly says "I see" four times in the first fifteen lines and indirectly implies that he sees three times (e.g., "I see before me ..."; "yet I see thee still ..."; "fatal vision ..."; "Mine eyes are made the fools ..."). Lines sixteen and seventeen offer his denouncement of the vision:

There's no such thing:
It is the bloody business which informs
Thus to mine eyes.

Macbeth's state of mind is most plainly revealed in the first fifteen lines. First of all, he's hallucinating; never a good sign of a good or sound state of mind. From this we must know that everything that follows is the work of a mind unhinged and deranged (disarranged) and we must know that Macbeth cracked under pressure before Lady Macbeth did, although Macbeth, being a trained man of war, can hold appearances together longer than she and continue to give the appearance of sensible conduct, while she soon retires to a wash basin and "Out, damned spot! out, I say!"

We also know that Macbeth questions himself as to whether the vision is real or an illusion:

Art thou not, fatal vision, sensible
To feeling as to sight? or art thou but
A dagger of the mind, a false creation, ....

We also know that his brain is oppressed with literally overwhelming fear--Macbeth's reason, his rational thought, has been overwhelmed: "Proceeding from the heat-oppressed brain." Shakespeare metaphorically describes and compares his fear to "heat." We also know that Macbeth compares the hallucinatory vision to his own dagger, which he draws from its sheath ("As this which now I draw").

His state of mind at this juncture is separated from reality and operating from a delusional perspective because, as he compares the real dagger to the vision, he regards the vision as an omen that points his way: "Thou marshall'st me the way that I was going; ...." The result of the soliloquy is that we know it is at this point that Macbeth's actions are set because of his state of mind, a state in which the power of his fear-shattered and unhinged mind accept his hallucination as an omen.

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