Add the XYZ ASCII file to your map as points. Convert it to a shapefile and interpolate it in to a digital surface model using the interpolation method you chose in question 2 (DSM questions). Note that different methods will take different amounts of time, but all will take some time (perhaps hours) to process. Hint – you are being provided a text file as it arrives from the data repository, and it may not be ready for immediate ingest to ArcGIS....  (Hints: make note of the coordinate systems the existing DSM is in when you import the ASCII file…)