I'm confused about whether the Picts became the scots or if the scots were a different group who came from somewhere else?
So the Scots refers to the people who live in the nation of Scotland (The Kingdom of Scotland was founded in ~800sAD can't remember the exact year), this is an umbrella term for all the ethnic peoples who live in Scotland. The Picts happen to be one of these ethnic people but the would not have been called Scots until the formation of the Kingdom of Scotland.