First-principles electronic structure studies based on local spin density functional theory and performed on extremely complex simulations of ever increasingly realistic systems, play a very important role in explaining and predicting surface and interface magnetism. This has led to solving even more challenging problems like the embrittlement of the Fe grain boundary, discussed here. Now, a major issue for first-principles theory is the treatment of the weak spin-orbit coupling (SOC) in magnetic transition metals and their alloys and its subsequent effects: (i) A major breakthrough in eliminating the numerical randomness for the determination of the magneto-crystalline anisotropy was made with the state-tracking and torque approaches. This now enables us to treat magnetostriction and its inverse effect, strain-induced magnetic anisotropy in transition metal bulk, thin films and alloys, (ii) The magneto-optical Kerr effects and x-ray magnetic circular dichroism are now directly calculated and compared with experiment. In all this work, and more recently, on the first-principles calculations of giant magneto-resistance in multilayers, extensive first-principles calculations and model analyses provide simple physical insights and guidelines to search for new magnetic recording and sensor materials.