Open the DEM that we prepared in the Preparing elevation data recipe.

The hillshade layer will be added to the QGIS project, as follows:

As in the case of the slope, the algorithm is part of the GDAL library. You will see that the parameters are very similar to the slope case. This is because slope is used to compute the hillshade layer. Based on the slope and the aspect of the terrain in each cell and using the position of the sun that is defined by the Azimuth and Altitude fields, the algorithm computes the illumination that the cell will receive. This is based on a focal analysis, so shadows are not considered and are not a real illumination value, but they can be used to render and to display the topography of the terrain.

You can try changing the values of these parameters to alter the appearance of the layer.

As in the case of slope, there are alternative options to compute the hillshade. The SAGA one in the Processing Toolbox option has a feature that is worth mentioning.

The SAGA hillshade algorithm contains a field named method. This field is used to select the method that is used to compute the hillshade value, and the last method that is available. Raytracing differs from the other ones as it models the real behavior of light, making an analysis that is not local but that uses the full information of the DEM instead because it takes into account the shadows that are cast by the surrounding relief. This renders more precise hillshade layers, but the processing time can be notably larger.

Enhancing your map view with a hillshade layer

You can combine the hillshade layer with your other layers to enhance their appearance.

As you used a DEM to compute the hillshade layer, it should be already in your QGIS project along with the hillshade itself. However, this will be covered by the hillshade because of the new layers produced by Processing are added on top of the existing ones in the layers list. Move it to the top of the layer list so that you can see the DEM (and not the hillshade layer) and style it to something like the following screenshot:

Lets see the steps to enhance the map view with a hillshade layer:

1. In the Properties dialog of the layer, move to the Transparency section, and set the Global transparency value to 50%, as shown in the following screenshot:
   
2. Now, you should see the hillshade layer through the DEM, and the combination of both of them will look like the following screenshot:
   

Another way of doing this is using the blending modes in QGIS. You can find more information about this in the recipe, Understanding the feature and layer blending modes of Chapter 10, Cartography Tips, or in the QGIS manual at http://docs.qgis.org/2.8/en/docs/user_manual/working_with_vector/vector_properties.html#style-menu.