Sand models as used in military are thematic 3D representations of an area of interest which combined the information of maps with a more realistic 3D bird's eye view of the terrain. Sand models have been used for military planning and war gaming for many years as a field expedient, small-scale map, for planning and training of military operations. This, however increasingly fell out of favor with improved maps, aerial and satellite photography, and later, with digital terrain simulations. The proposed system, a Digital Sand Model (DSM) using a Virtual Reality (VR) Workbench, is a digital replica of the same. It involves a leader interacting with the digital environment and other viewers share his view of the digital scene. The system uses a stereoscopic projector, a mirror and Viewing Screen setup to produce a 3D stereoscopic display. This VR system allows performing interactive 3D explorations via stereo camera setup and wearable IR LEDs. A gesture recognition system is also described which allows interaction with the system. The proposed system uses Model-View-Controller (MVC) architecture as the software design.