Wolfgang Schwanghart from the Geographisches Institut, Universität Basel has recently released a toolbox that allows analysis of relief and flow pathways in digital elevation models in Matlab. The toolbox can be used to visualize DEMs, extract simple derivatives, run (and modify) flow models, delineate drainage basins, produce hydrographs and implement similar DEM-based hyrdological analysis. For more info see the User Guide to TopoToolbox.
When you use TopoToolbox in your work, please refer to this publication:
Schwanghart, W., Kuhn, N. J. (2010): TopoToolbox: a set of Matlab functions for topographic analysis. Environmental Modelling & Software, in press.