DMS= Deadman's Shadow. It's for CL 10-12, so put it out of your mind first.
Check your level.
Purple = You're too high level (1.6+ above the monster's own CL) = no loot
Blue = You are 0.6 - 1.5 CL above the monster's own CL... loot chance half of max Green = You are 0.5 CL above or below the monster's own CL... max loot chance
Yellow = You are 0.6 - 1.5 CL below the monster's CL... still max loot chance, but harder to kill (so less loot)
Red = You are 1.6 CL or less than monster's CL. You still get loot, but it's really tough to kill them, and not worth your time~