Through 50 years of development, theory and methodology of DEM itself and DEM based digital terrain analysis (DTA) have been matured gradually, and played key roles in hydrology, geomorphometry, soil sciences, environmental science, agriculture, geologic hazard, civil engineering and military affairs. Based on an overall retrieval analysis of previous researches, this paper classifies different methods of DTA into four classes, i.e. analysis of terrain factor, terrain feature extraction, terrain statistical analysis and DEM based geo-modeling. Secondly, uncertainty and the scale issue of DTA are discussed. Besides, this paper points out that scale effect, optimal scale and scale transform are three basic scale issues of DTA. Thirdly, applications of DTA in geomorphometry, hydrology, soil science, agriculture, geologic hazard are introduced. Finally, this paper proposes that the conceptual framework of DTA, the accuracy of DEM modeling and the method of terrain analysis need to be improved, especially the integrated method of DEM embedded geographical modeling, for the simulation of more lifelike natural environment.