Behind the scenes, all this tool does is combine the multiple steps of creating a raster DEM into a single step. This could be done in practice by creating a TIN and then converting it to a Raster DEM. This approach has the advantage that the TIN Editing toolbar can be used interactively to improve the TIN. However, it has the distinct disadvantage that with large datasets (e.g. ALS, TLS, MBB, SfM), the performance is very poor. For this, Terrains are much more efficient. However, terrains can not be interactively edited like TINs. Because the Point Cloud to DEM tool is an all in one tool, there is no option to edit the surface. Thus, we use the Terrain creation workflow to create surfaces in this tool.