What appeared to be warts on your dog's head developed a crust of blood around it and while it doesn't hurt him seems to be itchy to your dog What is the way to treat this problem Thanks?

Please get this dog to a Vet asap. What you've described can be parasites, an allergy, a bacterial or viral infection, or rather a long list of other things. Dogs don't display pain even though they experience it. You've described a condition that is becoming more acute. Please get a pro to look into this right now. Can't fix this one over the internet.