The current version of the ConvertSensorToGeoPoint application doesn’t allow the use of a DEM. In the framework of removing the dependency to OSSIM from the OTB (future version 8.0), the conversion mechanism is deeply redesigned. The new mechanism will make it easy to add the use of a DEM for the conversion. So this functionality may come soon after the release of OTB 8.0 (I opened an issue for that).
The application use a default elevation value of 0.
I don’t see an easy way to perform this with a DEM. Adding this functionality to the current application would be quiet long. And this work would become obsolete when OTB 8.0 is released.