Take a look at the RasterLayer which can be used to add most types of raster data to your map or scene based application.
with DEM data you might need to look at adding a ColorMap to see it rendered as you want, but in the first instance just try adding it as a layer.
There is a sample which uses some DEM data in a simple app. It also shows you how to identify raster cell data to get the actual height values out of the dataset. This is a 2D Map app, but the same techniques should work for a 3D scene based application.
Does this help?
