In this paper, the authors derived the generalized sheet transition condition (GSTC) for the average fields at a metafilm embedded in a material interface. The interaction between the scatterers is taken into account to the first (dipole) order of approximation. The GSTCs contain as special cases a number of results previously given in the literature. These boundary conditions have several important applications. For numerical modeling of fields using standard techniques (FDTD, FEM, Galerkin's method, etc.) computation time and storage requirements may be reduced by eliminating the need to compute the fields in a finely graded mesh inside and near the metafilm. GSTCs may also be used to obtain analytical closed-form expressions for transmission and reflection coefficients at a metafilm, as well as to model easily their use in waveguides, resonators and other common electromagnetic structures.