Basically, when you open dfliquids, you see that string of .... stuff. That stuff indicates several flags about what dfliquids will do, when ordered to "place liquid". The commands are almost all one character long; you just press enter after typing them.
The first part is your current liquid; either magma or water. m changes to magma, w to water.
The next part is how much liquid to place; 0 to 7. Just input the desired level as a number between 0 to 7.
The f+ and f- things indicate whether or not to set the flow flag. When DF checks for flowing liquids, if the liquid was placed with flow ON, the liquid will flow just like anything else, if it was placed with flow OFF, it will sit there like a brick and not move until you remove it yourself, or interrupt it somehow. I don't know the specifics of what makes stuff flow. To turn this flag on/off, just input f+ or f-.
The s+, s. and s- flags indicate whether to set, add or remove. If s. is the current state, then all squares affected by the next dfliquids place command will be SET to the desired level of the desired liquid. If s+ is the current state, tiles will only be changed if they'd be gaining liquid. If s- is the current state, tiles will only be changed if they'd be losing liquid. For example, if you have a 3-tile long test space with 0, 4 and 7 levels of non-flowing water, and you set your current water level to 7, then place on the 0 tile with s-... basically, since the tile is currently 0 water and you'd be setting it to 7, this action would be ignored since you have the s- flag on - remove only.
Pressing p will set dfliquids to point by point application. Pressing r will set it to rectangular. You specify the width and height of the rectangle.
To actually put stuff down, go into [d]esignations or loo[k] in DF itself and move the cursor to the desired location. If you have it set on point to point mode, only the space your cursor is currently on will be filled; if in rectangular, the current location of the cursor will be treated as the top left of the rectangle. Pressing ENTER with no characters then fires a place command, which will drop liquids onto the screen.
As long as you don't unpause, you can always clean up your mistakes with no ill effect using dfliquids again, so you can mess around until you get the hang of it.