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I am a researcher from Romania and I have used xyz2grid21 ArcGIS tool (by Min-Lang Huang) in order to convert xyz files (LIDAR data) to ASCII and ESRI grid in order to obtain a DTM.

I need to know what algorithm does the XYZ2GRID tool use in order to rasterize the data? Is it using a mean or minimum value or does it interpolate somehow?

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    There is nothing about its algorithm in the included help file, so your best option is to ask the tool's designer directly. – Erica Aug 17 '14 at 15:00
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I don't believe that that tool is an interpolator, but rather a data format conversion tool. That is, it assumes that your data contained in an xyz format is already structured on a regular grid. You will need to import your irregularly spaced LiDAR XYZ points and then use an interpolation routine (e.g. IDW, splining, or kriging) to interpolate the data onto a grid DEM.

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