Digital elevation models

Point cloud: Millions of tiny dots frozen in mid-air. Each dot sits exactly where a piece of "stuff" was at that moment in time. Every dot is assigned a coordinate in a predefined / arbitrary coordinate system (XYZ) and a color code (RGB). Together, they form a Point Cloud - a 3D digital twin

Digital surface model (DSM): Imagine draping a blanket over the world from above. The blanket rests on the rooftops, the tops of the trees, and the ground. The digital surface model (DSM) is the shape of that blanket laid on top of the point cloud 

Digital terrain model (DTM): Remove buildings, vehicles, structures, high vegetation, and low vegetation from the DSM and the result is a digital terrain model (DTM). It is the "bare earth" result that remains after the surface has been cleared, leaving only the pure shape of the land itself