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I am recently learning SWAT modeling in QGIS and I have a problem in delineating the watershed as the DEM file is not working. I downloaded SRTM from USGS Earth Explorer, created mosaic and clipped raster by mask layer to create DEM of Sample area. Then I started a project in SWAT and after selecting the DEM warning appears saying 'DEM does not seem to be projected: Its units are unknown'.

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Yes your DEM is WGS84 (EPSG 4326), geographic coordinates in a decimal degree. You need to reproject your DEM with a projection that uses a meter unit, such as UTM with the proper zone that your study area is located in.

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For more details in how to project your raster data, check the following answer: Hillshade results look too grainy

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