The title points to Taiji, a Japanese town known for hunting dolphins, and the poem seems to be about that killing, though it never says so directly. Instead it works through suggestion. Inside the dolphin there is "a great lost music," which could mean the animal's calls, its sounds of fear, or the richness of a life being cut off. That music is "given to the night," so it goes out into the dark with no one to answer it.
Then the poem turns sharply. The "fountain" is most likely blood spraying or spreading, and the speaker calls it "so pretty a red." The tone is eerie because the words are so mild. The speaker seems to feel a flicker of aesthetic pleasure and, just beneath it, horror at feeling that way. The mood is quiet, stunned, and uneasy. By describing something terrible in the language of beauty, the poem makes the loss feel even sharper, and it leaves the reader to decide what to do with that discomfort.