Hey Larry,
The downloaded DEM data is 30 meter resolution -- the NED (National Elevation Dataset) data from USGS. You might have 10 meter data, but most DEM is 30 meter.
If you're seeing blockiness, make sure you aren't on the "Force SRTM" option in 3D Options. That uses the 90 meter worldwide dataset. Otherwise, maybe post a screen grab?
Thanks.