Dramatic irony is when the audience knows more than the characters. By act 1, scene 3 in Macbeth, the audience is far more acquainted with the three witches than anyone in the play. For the audience, they are a sinister lot from the start: one of them uses her powers to torture a woman's sailor husband with sleeplessness and an inability to find a proper port for his ship after she refused to give the witch chestnuts and another carries a man's severed thumb around. Their chanting is also ominous, creating an air of mystery and dread about the trio that Macbeth and Banquo only get the slightest taste of in their encounter with the witches. Essentially, the audience knows that they are bad news, and Macbeth does not.

When the witches give Macbeth their prophecy about his future titles of Thane of Cawdor and King of Scotland, they are mostly sharing information the audience already knows as well. In act 1, scene 2, the audience already learned that Macbeth has been made Thane of Cawdor. Due to this, the audience knows that the witches are, at least in this one area, telling the truth when they make the announcement to Macbeth and Banquo, thus giving their predictions of eventual kinghood for Macbeth and Banquo's sons additional validation as well.

Dramatic irony is created when the audience knows more than a character does. By the time Macbeth and Banquo meet with Weird Sisters, the audience already knows that they are malicious beings. The first witch has described a recent interaction she had in which she asked a sailor's wife for some of the woman's chestnuts, but the woman refused. Now, the first witch says that she will sail to Aleppo to catch up with the ship on which the woman's husband works; she claims that she will prevent him from sleeping for a long time, a kind of torture. Further, the first witch carries a "pilot's thumb" on her person. Good witches don't torture men or carry around bloody digits in their pockets! Thus, we already know more than Macbeth and Banquo.

Further, the Weird Sisters greet Macbeth as the Thane of Glamis, a title he already possesses, as the Thane of Cawdor, and as future king. Macbeth does not know that he has already been named Thane of Cawdor by the king, but we do. It happened in the previous scene. Thus, when Ross and Angus arrive and tell him that Duncan has named him Thane of Cawdor, it seems to Macbeth as though the witches have predicted the future. He does not know that they are merely the first to report something that has already happened, and this makes him trust them when he should not. Because they seem to have correctly predicted this one event, Macbeth is willing to believe that they are correct in their prediction that he'll become king.

The reader knows that the witches are going to mess with Macbeth, but Macbeth does not.

Dramatic irony occurs when the reader or audience knows something that the characters do not.  In this case, the witches are discussing how they will mess with Macbeth.  The audience or reader knows what will happen, but Macbeth does not.

In the beginning of the scene, the Weird Sisters describe their actions as witches and how they are going to mess with Macbeth.

I will drain him dry as hay:
Sleep shall neither night nor day
Hang upon his pent-house lid;
He shall live a man forbid:
Weary se'nnights nine times nine
Shall he dwindle, peak and pine:
Though his bark cannot be lost,
Yet it shall be tempest-tost. (Act 1, Scene 3)

Macbeth has no idea what is going to happen.  He encounters the witches and takes their prophecies very seriously, although Banquo is skeptical.  He also worries about Macbeth’s reaction.  While Banquo is inclined to think the whole thing silly, Macbeth seems highly affected by the witches and their predictions.

Good sir, why do you start; and seem to fear
Things that do sound so fair? I' the name of truth,
Are ye fantastical, or that indeed
Which outwardly ye show? My noble partner
You greet with present grace and great prediction
Of noble having and of royal hope … (Act 1, Scene 3)

The witches make three predictions.  They predict that Macbeth will be Thane of Cawdor and that he will be king.  They also predict that Banquo’s sons will be king.  These predictions have a great effect on Macbeth.  When he finds out that he is not named King Duncan’s heir, Macbeth has a strong reaction.

 The Prince of Cumberland! that is a step
On which I must fall down, or else o'erleap,
For in my way it lies. Stars, hide your fires;
Let not light see my black and deep desires ... (Act 1, Scene 4)

In this aside, he comments that he is ambitious and desires to be king.  This is both foreshadowing and another example of dramatic irony, because the reader knows that Macbeth is going to kill to get what he wants, but Duncan has no idea. He willingly goes to Macbeth’s castle.