This article investigates the prominent dilemma between capacity and reliability in heterogeneous ultra-dense distributed networks, and advocates a new measure of effective capacity to quantify the maximum sustainable data rate of a link while preserving the quality-of-service (QoS) of the link in such networks. Recent breakthroughs are brought forth in developing the theory of the effective capacity in heterogeneous ultra-dense distributed networks. Potential applications of the effective capacity are demonstrated on the admission control, power control and resource allocation of such networks, with substantial gains revealed over existing technologies. This new measure is of particular interest to ultra-dense deployment of the emerging fifth-generation (5G) wireless networks in the unlicensed spectrum, leveraging the capacity gain brought by the use of the unlicensed band and the stringent reliability sustained by 5G in future heterogeneous network environments.