To make it a smooth circle, first go into user preferences and enable an add-on called "Loop Tools" (search "loop" in the search box).
Select the edge you want to "straighten" into a circle, right click and select Loop Tools > Circle.
This should leave you with a clean circular edge.
Follow these steps:
Select the circle (or Mesh) which you want to make round.
Go to modifiers tab, Apply Subdivision modifier to the mesh.
(You can increase subdivision counts according your needs. Increasing Count To higher value than 2, Cause blender respond slower)(Recommended=2)
You will get the more round circle but it will increase vertices count..
Hope it'll help you buddy...