Abstract: In this paper,the methodology of drainage network extraction from grid-based the digital elevation model (DEM) is reviewed.Then the current situation of application of information extracted from a DEM data in the field of hydrology and water resources are remarked.It is shown that the digital model plays a great role in datamining in hydrology and water resources.Water-related datamea sured at gaugedstations could be assimilated to areal information over a catchment by the digital model,so as to serve for all trades and professions of national economy.Finally the position and the perspective of the digital hydrology (DH) in digital earth are discussed.The DH is an important component of digital earth.It needs further research.