Erdas Imagine/LPS RPC orthorectification

When creating orthos in Erdas imagine or LPS from geoeye-1 (or other) satellite images having _rpc.txt files, which are referenced in WGS84 generally, what should be the projection of the used DEM? If there is projection information in the used DEM and differs from WGS84, does erdas first matches the two different sources and recalculates elevation values, or the DEM must be in WGS84 also? I could not find any info on this. Thank You.