What do you mean by 'The program does not recognize the file".  Do you mean ENVI is unable to import the DEM?  What format is the DEM stored in?  Or do you mean that you were able to import the file but not use it in the Orthorectification process?  Does the DEM import with a map projection?  If so, if you geographically link the DEM with the QuickBird file, do they cover similar geographic extents?