2. Style the background layers

First we're going to style the background layers on top of which we will later visualise the arrows of the flow direction.
1. Start QGIS

2. Add the DEM (dem.tif), flow direction raster (flowdir.sdat) and channels (channels.shp) to the Layers panel. You can drag and drop it from the browser panel or use from the main menu Layer | Add layer | Add raster layer...

3. Deactivate the flowdir layer by unchecking the box.

4. Click to open the Layer Styling panel. Make sure DEM is the active layer. Choose Singleband pseudocolor as renderer. Click on the arrow right of Color ramp and choose Create New Color Ramp.... Choose Catalog: cpt-city and then from Topography select elevation and click OK. Then click Classify. Under Layer rendering Change the Blending mode to Multiply.

5. Click right on DEM in the Layers panel and choose Duplicate Layer.

6. Deactivate DEM by unchecking the box and activate the DEM copy layer.

7. Click right on the DEM copy layer and choose Rename Layer. Rename the layer to Hillshade.

8. In the Layer Styling panel choose Hillshade as renderer. Keep the default settings. Only change under Resampling Zoomed in to Bilinear and Zoomed out to Average. This makes the visualisation of the hillshade smoother.