Current algorithms for computing contributing areas from a rectangular grid digital elevation model (DEM) use the flow-routing model of O'Callaghan and Mark (1984), which has two major restrictions: (1) flow which originates over a two-dimensional pixel is treated as a point source (nondimensional) and is projected downslope by a line (one dimensional) (Moore and Grayson, 1991), and (2) the flow direction in each pixel is restricted to eight possibilities. We show that large errors in the computed contributing areas result for any terrain topography: divergent, convergent, or planar. We present a new model, called digital elevation model networks (DEMON), which avoids the above problems by representing flow in two dimensions and directed by aspect. DEMON allows computation of both contributing and dispersal areas. DEMON offers the main advantage of contour-based models (e.g., Moore et al., 1988), the representation of varying flow width over nonplanar topography, while having the convenience of using rectangular grid DEMs. ¿ American Geophysical Union 1994