I have a DEM and I want to create a DTM from that DEM. Is it possible to do this in ArcGIS?
DTM is used interchangeably with DEM sometimes, but since you are asking to go from DEM to DTM then you must have something specific in mind.
DEM format is normally a raster where each pixel's value represents an elevation.
DTM sometimes refers to non-raster formats like a Triangulated Irregular Network (TIN). If that's what you want, you could use the ArcGIS 3D Analyst extension to build a contour layer (use "Contour" tool) from the DEM, and then create a TIN (use "Create TIN" tool) from the contour feature class. (http://www.esri.com/news/arcuser/0101/avfiles/lesson6.pdf)
Sometimes people use "DTM" to mean "bare earth surface". If you want to do that then the answer is "no". There is no tool in ArcGIS that automatically detects and removes things like buildings from a DEM. If you have a DEM that was derived from a point cloud (like LiDAR) then you would need to use the original point cloud to generate a bare earth surface.
Working in ArcGIS, you might want to use a Terrain Dataset instead of just a TIN. You still have to go through the steps to convert the DEM to a vector format. Once you have added data sources to the Terrain Dataset the TIN is as needed. The starting point for terrains is to use the New Terrain wizard. (One way to do this: in ArcCatalog, create a file geodatabase, then create a feature dataset inside that, then select the feature dataset and use "File->New->Terrain") Using the wizard will help you define data sources and pyramid levels.