The knight's story reveals him to be wandering the countryside while ailing from an unknown sickness. He blames his condition on a lady. He's dying, much like the sedge (marsh grasses). He reveals that others (kings, princes, and warriors) have fallen prey to the same illness—which is caused by loving a beautiful lady.
According to the knight, the lady is beautiful, she speaks a "language strange," and she is a "faery's child." He asserts that she expressed love to him. Her traits are described only via his words, so the reader cannot be sure regarding her identity or intentions.
While readers know very little about the unnamed speaker, his dialogue is revealing. His diction matches that of the knight, so the speaker may also be of a similar social rank. He also pays attention to details, using sensory language to describe both the setting and the knight's appearance.