1. Watershed Analysis

2. Basin Creates a raster delineating all drainage basins.
All cells in the raster will belong to a basin, even if that basin is only one cell.
The drainage basins are delineated within the analysis window by identifying ridge lines between basins.
The input flow direction raster is analyzed to find all sets of connected cells that belong to the same drainage basin.

3. The drainage basins are created by locating the pour points at the edges of the analysis window (where water would pour out of the raster), as well as sinks, then identifying the contributing area above each pour point. This results in a raster of drainage basins.

4. DEM at Step 15

5. Hydrological Modeling
DEM_UTM83
FlowDir
Sinks
Filled
FlowDir2
Watershed
FlowAcc
Stream Link
Source
Reclass
Con
Net
Hydrological Modeling

6. Flow Direction
Creates a raster of flow direction from each cell to its steepest downslope neighbor.

7. Step 17 - flowDir

8. Sinks
A sink is a cell or set of spatially connected cells whose flow direction cannot be assigned one of the eight valid values in a flow direction raster.
This can occur when all neighboring cells are higher than the processing cell or when two cells flow into each other, creating a two-cell loop.
To create an accurate representation of flow direction and, therefore, accumulated flow, it is best to use a dataset that is free of sinks. A digital elevation model (DEM) that has been processed to remove all sinks is called a depressionless DEM.
From ArcGIS 10 Desktop Help

9. Step - Sinks

10. Fill
Fills sinks in a surface raster to remove small imperfections in the data.
Sinks (and peaks) are often errors due to the resolution of the data or rounding of elevations to the nearest integer value.

11. High pass filters Return: Small values when smoothly changing values.
Large positive values when centered on a spike
Large negative values when centered on a pit

12. 35.7

14. Step 19 - Fill

15. Step 20 – flowDir2

16. Flow Accumulation
From ArcGIS 10 Desktop Help

17. Step 21 before inverting

18. After inverting

19. Conditional
The results of Flow Accumulation can be used to create a stream network by applying a threshold value to select cells with a high accumulated flow.
For example, the procedure to create a raster where the value 1 represents the stream network on a background of NoData could use one of the following:
Perform a conditional operation with the Con tool with the following settings:
Input conditional raster : Flowacc
Expression : Value > 100
Input true raster or constant : 1
From ArcGIS 10 Desktop Help

20. Net50K

21. Stream Link
Assigns unique values to sections of a raster linear network between intersections.
Links are the sections of a stream channel connecting two successive junctions, a junction and the outlet, or a junction and the drainage divide.
From ArcGIS 10 Desktop Help

22. Step 24 - Source

23. Watersheds
Awatershed is an area of land that drains all the streams and rainfall to a common outlet such as the outflow of a reservoir, mouth of a bay, or any point along a stream channel.
The word watershed is sometimes used interchangeably with drainage basin or catchment.

24. Ridges and hills that separate two watersheds are called the drainage divide.
The watershed consists of surface water--lakes, streams, reservoirs, and wetlands--and all the underlying ground water.
Larger watersheds contain many smaller watersheds. It all depends on the outflow point; all of the land that drains water to the outflow point is the watershed for that outflow location.

25. Watersheds_50K

26. Step 25 - Watersheds