I am very new to ECE and when i googled circuits for the beginner and this was one of them.
So far i have a basic knowledge of transistors and that they exist. please correct me if i am wrong.
- Current flows to junction 1 and ignores it because transistor is currently off. 
- current flows to water sensor and if it is not sensing any water means that the circuit is not active. 
- in case there is water, at junction 2 current activates the DC 548 transistor. 
- i assume after that current from junction 3 goes in to the ground. 
- At the same time, at junction 1 current starts to flow towards junction 4 and 5 which activates the speaker. 
- Capacitor is connected between junction 4 and junction 2 is there to act as a some kind of short battery to make the sound to decay nicely instead of weird crackling. 
Question: Also i have a thought that capacitor could be use as some kind of oscillator but i don't see how would it work in this circuit.
i started to learn electric circuits this morning so please be gentle.

 
     
    