1) back up your database
2) find out the ID of the dc.type metadata field

SELECT metadata_field_id FROM metadatafieldregistry WHERE metadata_schema_id = '1' AND element = 'type' AND qualifier IS NULL;
3) replace XXX with the ID

UPDATE metadatavalue
SET text_value='Thesis'
WHERE text_value='thesis'
AND metadata_field_id=XXX
4) update your indices
[dspace]/bin/dspace index-update

5) If you are using Discovery, also run:
[dspace]/bin/dspace update-discovery-index -b


Compulsory reading: DSpace Mailing List Etiquette