The present invention relates generally to interpolation methods for automatic generation of an accurate digital elevation model, and more particularly relates to intelligent interpolation methods for accurate extraction of 3-dimensional digital elevation models from satellite images, aerial photographs, or land surveying. The present invention is composed of three basic processes: The first process (102) of COG/ECI elimination, the second process (104) of hole-fill segmentation, and the third process (103) of noise-remove segmentation. The invention produces an accurate digital elevation model even for the areas with open boundaries such as the sea off the coast and over a river.