A pump capacity of 10 m^3/hr at 30 meters head indicates the pressure difference created by the pump, expressed in terms of fluid column height. The 30 meters head represents the pressure difference across the pump, which can be converted to pressure using the fluid's weight density. To analyze the system, a pump curve is essential for understanding how head varies with flow rate, especially for a centrifugal pump. For a positive displacement pump, the flow rate remains constant, making the head measurement less relevant. The discussion emphasizes the need to calculate pressure drops in the system to determine flow rates in different lines effectively.