Spoiler
After Shaw and David arrive at the planet they think is the Engineer home world, they discover what appears to be a single Engineer city/colony. David then flies the ship over the city and opens the cargo hold and drops the black goo on it. In order to prevent the further spread of the infection, some type of bomb detonates and incinerates all of the city's inhabitants. After the Engineer city is destroyed, David secretly contacts Wayland Yutani to update them on the status of the Prometheus expedition and the discovery of the black goo and Engineer planet; he also requested supplies (mainly lab equipment) and a new body. After receiving a whole new body, David wirelessly uploads his memory/programming into it and then captures and incapacitates Shaw who decided to leave David after he dropped the black goo on the Engineer city. David then begins to study the black goo and discovers from archived data on the engineer ship that the engineers' black goo was originally designed to mutate life forms into hostile creatures which attack and infect other life forms with black goo; this is what happened to Fifield and the worms in Prometheus. However, use of the black goo had some unintended consequences; instead of just destroying life, it sometimes created a new powerful highly adaptive species called the "morph" (alien with elongated skull). The morph is created when reproductive cells such as spores, eggs, embryos, etc. have been mutated by the black goo into a parasite (face hugger, trilobite, etc.) which can impregnate a host with a morph alien embryo. The morph gestates inside its host until mature enough to leave which results in a violent death for the host. Apparently, the engineers have encountered these morphs in the past when they used the black goo to eliminate life on planets. The engineers revered, respected, and feared this powerful alien species, which unlike life forms mutated by the black goo, has the power to procreate, hence the reason for the mural depicting what looked like a xenomorph and face hugger in the room where the black goo was stored in at the Engineer installation on LV-223. David uses the knowledge he discovered on the Engineer ship to experiment on Shaw's eggs and create the first face hugger eggs. After creating the face hugger eggs, David then communicated with Weyland Yutani again, requesting additional human subjects (mainly women) to experiment on. So, Weyland Yutani sends the Covenant and its human crew, which consists of hundreds of human couples, to his location. After the Covenant arrives to the planet, a small group of Covenant crew members is sent to scout the surface and find the most suitable location to build a colony. However, when the Covenant crew land on the planet, they immediately come into contact with mutated spores that turn some of them into neomorph aliens. David eventually reveals himself to the Covenant crew and helps them destroy the neomorphs, and after earning their trust, he convinces some of the them to follow him to the place where he keeps the face hugger eggs. One of the Covenant crew members is then attacked by a face hugger which leads to the creation of the protomorph alien. While the Covenant crew is dealing with the protomorph alien, Walter goes to confront and stop David. Walter and David fight, and it appears that Walter destroys David. Eventually the protomorph is killed, and the surviving Covenant crew members re-enter hypersleep with the rest of the colonists. After the Covenant crew goes back into hypersleep, Walter opens a storage compartment, revealing two cylinders of the black goo, implying that Walter is now actually David. David, who is now in control of the Covenant, intercepts an ancient Engineer distress signal, talking about an alien/morph outbreak on a crashed Engineer ship. David plots a course to its location in hopes of learning more about the alien creature... The end
