Yes, it can dispense just hot water. To do so, you'd want to use the K-cup side (the left side), make sure there is no pod in the machine, set cup underneath and then press the quantity of water (12/10/8 oz). That's it, we make hot tea or hot chocolate doing this method all the time.
You MAY want to do the smallest amount (8oz), then throw that out and then do your real serving of hot water. This would flush out the pod area and nozzle, just in case any coffee residue was left inside. Don't have to, just a suggestion.