The sub-alpine and alpine Sphagnum peatlands in Australia are geographically constrained to poorly drained areas c. 1000 m a.s.l. Sphagnum is an important contributor to the resilience of peatlands; however, it is also very sensitive to fire and often shows slow recovery after being damaged. Recovery is largely dependent on a sufficient water supply and impeded drainage. Monitoring the fragmented areas of Australia’s peatlands can be achieved by capturing ultra-high spatial resolution imagery from an unmanned aerial systems (UAS). High resolution digital surface models (DSMs) can be created from UAS imagery, from which hydrological models can be derived to monitor hydrological changes and assist with rehabilitation of damaged peatlands. One of the constraints of the use of UAS is the intensive fieldwork required. The need to distribute ground control points (GCPs) adds to fieldwork complexity. GCPs are often used for georeferencing of the UAS imagery, as well as for removal of artificial tilting and doming of the photogrammetric model created by camera distortions. In this study, Tasmania’s northern peatlands were mapped to test the viability of creating hydrological models. The case study was further used to test three different GCP scenarios to assess the effect on DSM quality. From the five scenarios, three required the use of all (16–20) GCPs to create accurate DSMs, whereas the two other sites provided accurate DSMs when only using four GCPs. Hydrological maps produced with the TauDEM tools software package showed high visual accuracy and a good potential for rehabilitation guidance, when using ground-controlled DSMs.