Beitzah, Chapter 1, Mishnah 2. The Mishnah opens: "HaShochet chayah v'of b'Yom Tov" - a person who slaughtered a non-domesticated animal, such as a deer, or a bird, on Yom Tov. Slaughtering on Yom Tov is permitted for the sake of eating, but an undomesticated animal and a bird, unlike a domesticated animal (such as a sheep or a cow), require covering of the blood - a mitzvah that applies only to an undomesticated animal and a bird.
The Gemara clarifies that the Mishnah is not discussing someone who has already slaughtered, but rather someone who comes to ask about the halachah: he wishes to slaughter an undomesticated animal or a bird on Yom Tov, and how should he proceed?
The dispute between Beis Shammai and Beis Hillel:
"Beis Shammai omrim: yachpor b'deker vichaseh" - he may dig with a spade and cover the blood with the earth he raises. The Gemara qualifies this and establishes the ruling as referring to a spade that is already stuck in the ground - a spade that was embedded in the earth from before Yom Tov, since digging on Yom Tov is forbidden. It is likewise required that the earth be loose, for otherwise he would transgress the melachah of grinding by crumbling the soil. It emerges that the case is a specific and defined one: a spade embedded in soft earth, which he can pull out and use its earth to cover the blood.
"U'Beis Hillel omrim: lo yishchot ela im ken hayah lo afar muchan mib'od yom" - he should not slaughter unless he prepared earth for himself from before Yom Tov, so that the earth was set aside and designated for this purpose and is not muktzeh. In this way he does not need to perform any action, such as pulling a spade out of the ground, which resembles the melachah of digging, since the earth is ready and waiting before him.
"U'modim she'im shachat sheyachpor b'deker vichaseh" - Beis Hillel were speaking about someone who comes to ask beforehand whether he should slaughter; but as for one who has already slaughtered, Beis Hillel agree with Beis Shammai that he should pull the spade out of the ground and cover the blood with its earth. And all of this is under the conditions mentioned: that the spade was already embedded in the ground from before Yom Tov, and that the earth is loose and does not need to be crumbled.
Ashes of a stove:
The final statement in the Mishnah is not part of the dispute between Beis Shammai and Beis Hillel, but a separate ruling that all agree to: the ashes of a stove are considered prepared and designated for covering the blood, and there is no need to set them aside specially while it is still day. This is something that lies ready for such use, and a person naturally has in mind that one of the possible uses of ashes is covering blood.
However, this applies only to ashes that come from a fire kindled before Yom Tov. But ashes that come from wood or coals that were burned on Yom Tov itself were not in a person's mind while it was still day to be used for covering the blood. Nevertheless, if the ashes are still so hot that one can roast an egg on them, they have a use that is permitted on Yom Tov and they are not muktzeh - and therefore, even though they were burned on Yom Tov, it is permitted to move them and cover the blood with them, since they have a permitted use of roasting an egg.
In summary: In this Mishnah we learned the laws of covering the blood on Yom Tov for one who slaughters an undomesticated animal or a bird: Beis Shammai permit digging with a spade and covering (with a spade already embedded and with loose earth), while Beis Hillel hold that he should not slaughter unless he prepared earth while it was still day - and they agree that after the fact, if he already slaughtered, he may dig with a spade and cover. We also learned the agreed-upon ruling that the ashes of a stove are considered prepared, and the distinction between ashes from a fire kindled before Yom Tov and ashes burned on Yom Tov whose heat is suitable for roasting an egg.