The ability to efficiently and robustly recover accurate 3D terrain models from sets of stereoscopic images is important to many civilian and military applications. A stereo matching has been an important tool for reconstructing three dimensional terrain. However, there exist many factors causing stereo matching error, such as occlusion, no feature or repetitive pattern in the correlation window, intensity variation, etc. Among them, occlusion can be only resolved by true multi-image stereo. In this paper, we present multi-image stereo method using DEM fusion as one of efficient and reliable true multi-image methods. Elevations generated by all pairs of images are combined by the fusion process which accepts an accurate elevation and rejects an outlier. We propose three fusion schemes: THD(Thresholding), BPS(Best Pair Selection) and MS(Median Selection). THD averages elevations after rejecting outliers by thresholding, while BPS selects the most reliable elevation. To determine the reliability of a elevation or detect the outlier, we employ the measure of self-consistency. The last scheme, MS, selects the median value of elevations. We test the effectiveness of the proposed methods with a quantitative analysis using simulated images. Experimental results indicate that all three fusion schemes showed much better improvement over the conventional binocular stereo in natural terrain of 29 Palms and urban site of Avenches.