[rodrigofmacedo]

Ok,

I wouldn't struggle to much with that. As per the experience I'm having, I suggest you to:

1. Try the reconditioning of your DEM;

or

2. Instead of use the HMS Project Setup tools to extract the data you want, use the Clip tools available on ARCToolBox to clip and extract the data you want (to narrow it down), and then proceed with your catchment processing (Grid, Basin files, etc...).

Rodrigo.