To scientifically investigate the flood control capacity, the drainage capacity and their improvements in the hilly city, taking the Yushan Bay as an example, the hydrologic and hydrodynamic model of hilly city was established based on SWMM (storm water management model), which can consider the torrential flood and drainage network together. Aiming at the un-gauged area, the model calibration was realized through surveying historical overflow points and using the comprehensive runoff coefficient method. In this model, the flood-cutting channels were discretized into calculation units with each section length of 10 m, and their control zones were divided by the Tyson Polygon Method to realize the simulation of the flood-cutting channels with variable sections and multiple outlets. The calculated averages of the maximum one-hour discharge peaks were within the recommended range of the standard value. As the influences of previous rainfall in the study area and the discharge distributions in the flood-cutting channels were considered in the model, the rationality of calculating the discharge peaks of the flood-cutting channels was ensured. Then using the renovated dimensions of the flood-cutting channels, this study calculated the flood control and drainage capacity of the downstream core planning area, and presented an improvement scheme, which is increasing the pumping capacity of Jinjing River Pump Station and reducing the control water level of Yushan Lake to increasing its storage capacity.