I'm going to list a bar name and street, as I've found an amazing group of tapas bars.
The bar is Taberna Ultreya and it's on calle General Pardiñas, 26. It's in the Salamanca shopping area near Lista and Goya metros. This bar calls itself a Taberna Jacobea, which means it serves food from the north related to the camino de Santiago eg Galicia, Leon, Navarra etc.
All the free aperitivos seemed excellent in the bars around here. THere's another bar close by called Casa Poli where you can buy (for example) a banderilla de morcilla which is as big as a montado in other places for only 1 Euro 25. Well worth checking out, especially if you've been shopping in the area.
I know there are other good areas of Madrid for tapas bars. Perhaps people can add to this thread to add to our knowledge ? But please not the well-known areas like La Latina or the area of Cuevas near Plaza Mayor

I stayed in Arguelles the last time I was in Madrid. It is relatively near the Plaza de Espana, and although it cannot compare with areas like Plaza de Santa Ana or La Latina in volume of tapas bars, it does have some places worth checking out. Unfortunately, I don't remember the names... But it would be worth strolling around the area surrounding Plaza de Espana for an evening.

What is exactly Tapas anyway ?

I know it is a spanish version of buffet.