The entire village lay in smoking ruins. Kelton had seen to that. Now, he gazed upon the carnage in grim satisfaction--men, women, and children decapitated and worse. His orders had been to round up the bucks and take them prisoner. Kelton was not in the habit of keeping Indians alive. He took no prisoners.
Not that the locals would object too strenuously. The Arapaho and others had been attacking the outlying pioneers for the last two years, the young warriors raiding seemingly at will.And then there was that dance they’d been doing–the Ghost Dance, Kane, one of his scouts, had called it. Supposed to bring back the dead, he’d said. Kelton smiled. Not likely–there’d be no more raiding by this group. The clatter of hooves drew his attention away from the encampment. Six riders approached. The man in

I think I'd enjoy it more if MC weren't thoroughly evil.

One thing I think would improve it greatly: tell me *before* I wonder, where we are and what's up. (I didn't know the victims were Indians until end of paragraph 1; what century we were in until paragraph 2.) It should be easy enough:

The Arapaho village lay in smoking ruins. Captain Kelton had seen to that.

or

Captain Kelton gaze in grim satisfaction on the smoking ruins of the Arapaho village.

(The last version doesn't make me wonder who's seeing the smoking ruins.)

You also might want to take one or two of the hyphens away from the second paragraph and replace them either with colons, or semi colons. (the first one is necessary. The two that come afterwards I'm not too sure).

But all of that's nitpicking. Otherwise, it works very well.

"Kelton smiled as he gazed over the smoking ruin of the Arapaho village."

Bam, we know what he's looking at and exactly how he feels about it.