A discoid rash is the result of discoid lupus, according to WebMD. Discoid lupus is a particular form of the disease that affects only the skin, causing large red, circular rashes with possible scarring.
As the Lupus Foundation of America explains, rashes from discoid lupus, which is also called chronic cutaneous lupus, do not itch or hurt, but they may cause lesions and skin discoloration. Lesions on the scalp may lead to hair loss, which can be permanent if scarring occurs. Discoid lesions may also be very sensitive to sunlight, so protective measures such as avoidance of sun, sunscreen and protective clothing are recommended. About 10 percent of people with discoid lupus later develop lupus in other organs.