FME has a couple of options for this (DEM creation).

If you need a Raster DEM (e.g., GeoTIFF or ascii grid) then there is a tool called RasterDEMCreator, this lets you choose a tolerance and a output pixel size.

Alternatively if you want a triangulated mesh you can use the SurfaceModeller, this will output a TIN.

Alternatively if you just want regular points then you can use the DEMGenerator to get a grid of points to your desired resolution.

All option allow for the inclusion of breaklines if you have them.

Use 3DForcer to set Elevation to your elevation attribute values.

Input your 3d points to the Points/Lines port of DEMGenerator or SurfaceModeller, chose the Surface Tolerance, Interpolation Method and Cell Spacing.

Do what you need to do with your DEM.

I would like to calculate the volume using the raster DEM. I have a base level from where the height will be calculating @caracadrian​ 

@caracadrian​ as you recommend it, I used 3DForcer  to set the elevation. Then I wanted to use DEMGenerator  however what should Breaklines be?

Breaklines are 3D lines that indicate a forced change of slope. For example the toe of a roadway or river edges.

They are very important when your points are not distributed evenly or to increase accuracy of your surface model.

You need to prepare your data for VolumeCalculator.

I recommend creating upper and lower surfaces, clipping them to the same footprint and using SolidBuilder to create a solid that FME can calculate volume on. You have to be careful on how you handle voids.