Second-half goals from Luke Chambers and Dexter Blackstock secured back-to-back league wins for Forest and ended Scunthorpe's five-game unbeaten run.
The hosts' strikers were guilty of wasting several good opportunities but centre-back Chambers showed them how to score with the game's opener after 69 minutes and Blackstock doubled the lead soon after with his side's second.
The three points were no more than Davies' men deserved after dominating much of the game at the City Ground, and the former Derby boss was delighted his players got their just rewards.
"We showed courage to stick to it, we showed patience, and we got what our play deserved," Davies said.
"It was a fantastic display. It has been coming for weeks.
"We've got to remove all negativity from this club. If we can do that then, in my opinion, there's no limit to where this group of players can get to.
"This is a results business, but I'm pleased with the shape the squad is taking. Things are working with a lot of guidance and if we get the time, then I'm very confident of where we can go."
Forest started brightly with a succession of corners coming inside the first 10 minutes, but failed to test the goalkeeper until the quarter-hour mark as Chris Gunter headed straight at the feet of Joe Murphy.
Nathan Tyson and Blackstock were next to waste decent opportunities while Paul Hayes and Michael O'Connor both fired wide for the visitors. The second half looked likely to carry on in the same manner with Blackstock, Tyson and substitute David McGoldrick all failing to find the net when in good positions.
An injury then forced Murphy to the sidelines with Josh Lillis his replacement, but the young goalkeeper's first task was to pick the ball out of the net as with 25 minutes of the second period played, Chris Cohen whipped in a corner from the right, which Chambers met with his head to make it 1-0.
And soon after the opener came the second as Paul Anderson fired in a low cross which was met by the onrushing Blackstock who converted to make it two after 72 minutes.
Jonathan Forte was unlucky not to halve the deficit for Scunthorpe with seven minutes remaining when his deflected shot hit the post in the last meaningful action of the match, but a disappointed Iron boss Nigel Adkins refused to chastise his players.
"The goals changed the game for us," Adkins said. "Even though Forest were in the ascendancy, at 0-0 we've got a chance, but they scored and that was that really.
"We're disappointed because at the end of the day we could have got something out of the game but we haven't.
"We want to play football and we've tried to do that this season. It didn't pay off, but we're really enjoying the challenge of the Championship."