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This paper introduces two methods for DEM generation in IKONOS stereo imagery using modified rational polynomial coefficients (RPC). The Rational Function Model (RFM) is the sensor model of IKONOS imagery for end-users. IKONOS imagery vendors provide RPC, RFM coefficients for IKONOS, for end-users with imagery. So it is possible that end-users obtain geospatial information in their IKONOS imagery without any additional effort. But there are still requirements for the rigorous DEM on RPC user. In IKONOS imagery, physical sensor modeling is difficult because IKONOS vendors do not provide satellite ephemeris data and abstract sensor modeling requires many ground control points (GCPs) well distributed in the whole image as well as other satellite imagery. Therefore RPC modification is the better choice. If a small number of GCPs is available, DEM can be generated using modified RPC by methods which are introduced in this paper. Study on DEM generation using modified RPC in IKONOS guarantees result reliability. Pseudo GCP generated with vendor's RPC and additional GCP make it possible through sequential solution.