What is DEM...?

Digital Elevation Mapping is using
real elevation maps of Earth along with Topographic maps overlaid to create real routes as prototypical as possible with the additional use of track charts from the railroads as a guide to track elevation, signaling, infrastructure(depots, yards, sidings, crossovers,etc).
That is the whole purpose of DEM technology, to recreate the Earth for real-time mapping for a wide range of uses not regulated to just railroads. Military & commercial applications abound.
Created terrain maps using any other source may be a type of digitally produced, but they are not DEM's because they have no prototypical source.
Using operation data such as what a locomotive & train can take as far as grades, curve radius, etc can however be useful in creating a very attractive route!
I applaud your desire to produce something other than a "flat" terrain for our use in Auran Trainz!