Over several years the Institute of Geodesy and Geoinformatics (GGI) was engaged in the design and development of a digital zenith camera. At the moment the camera developments are finished and tests by field measurements are done. In order to check these data and to use them for geoid model determination DFHRS (Digital Finite element Height reference surface (HRS)) v4.3. software is used. It is based on parametric modelling of the HRS as a continous polynomial surface. The HRS, providing the local Geoid height N, is a necessary geodetic infrastructure for a GNSS-based determination of physcial heights H from ellipsoidal GNSS heights h, by H=h-N. The research and this publication is dealing with the inclusion of the data of observed vertical deflections from digital zenith camera into the mathematical model of the DFHRS approach and software v4.3. A first target was to test out and validate the mathematical model and software, using additionally real data of the above mentioned zenith camera observations of deflections of the vertical. A second concern of the research was to analyze the results and the improvement of the Latvian quasi-geoid computation compared to the previous version HRS computed without zenith camera based deflections of the vertical. The further development of the mathematical model and software concerns the use of spherical-cap-harmonics as the designed carrier function for the DFHRS v.5. It enables - in the sense of the strict integrated geodesy approach, holding also for geodetic network adjustment - both a full gravity field and a geoid and quasi-geoid determination. In addition, it allows the inclusion of gravimetric measurements, together with deflections of the vertical from digital-zenith cameras, and all other types of observations. The theoretical description of the updated version of DFHRS software and methods are discussed in this publication.