Warning, this story contains content that some readers might find distressing.

A court has heard a man charged with animal cruelty was found standing in the middle of a main road in Adelaide covered in blood, holding the severed head of a dog in one hand and a meat cleaver in the other.

James Alexander Rech, 19, was charged with ill treating an animal, property damage and carrying an offensive weapon after police were alerted to a disturbance at a home in Hampstead Gardens, in Adelaide's north-east in the early hours of Tuesday morning.

Patrols were called to the home on North East Road after reports of a disturbance.

Police found a mutilated brown Staffordshire bull terrier inside the property.

Mr Rech, the home's sole occupant, was arrested at the scene and detained under the Mental Health Act.

In opposing his release on bail, police prosecutor Manfred Wojtasik told the court a member of the public found Mr Rech standing in the middle of North East Road holding the head of the pet dog.

"They located the defendant standing in the street covered in blood holding the head of the Staffordshire Bull Terrier in one hand and a meat cleaver in the other and his clothing was covered in blood," he said.

The court heard police were confronted with a gruesome bloodbath inside the home where they found dismembered parts of the dog's body.

Mr Wojtasik said Mr Rech's housemate — known as 'Fry' — owned the dog and had not been seen since the incident.

The court heard there were concerns among investigating police about his "apparent disappearance without a trace."

"Police are yet to establish whether all of the blood has come from the dismembered animal or whether there may well be blood from a human being at the scene," he said.

"He doesn't seem to have accessed any money, friends and acquaintances don't know where he is."

The court also heard that it had been established that there "were no issues with [Mr Rech's] mental health" and he was taken into custody by police.

Accused 'found' the dog, says defence lawyer

Mr Rech's lawyer Stephen Ey told the court the charges are contested and that it was "a case of being at the wrong place at the wrong time".

"He came home and found the window to the bathroom damaged and the dog," Mr Ey said.

"He believes it was someone who has come there to send a threatening message to him and or Fry over an alleged debt."

Mr Ey said the disturbance reported to police was his client coming home to the "bloodbath" and discovering the dog head and meat cleaver on a bed.

He said dog bites police found on his client's body were from a friend's dog a day or so before.

Chief Magistrate Mary-Louise Hribal refused to grant Mr Rech bail due to the seriousness of the allegations.

Mr Rech was remanded in custody to face court again next week.

SA Police said a second uninjured dog was also found at the home and that it was now in the care of Port Adelaide Enfield Council.