Rob,
The DEM to Raster tool is somewhat of a legacy tool that is not needed in the past few releases. Assuming you have a USGS .dem file format, you should be able to navigate to it in the Catalog window of ArcMap, right click it and calculate statistics. After you have stats we just draw the data. You'll probably have to assign a spatial reference too though. Basically, .dem files have native support nowadays so there is no need to run the tool.
Eric