It is the horizontal distance - ALWAYS, whether shooting uphill or downhill, from a tree or in a hole. Many rangefinders have a true ballistic range or something along those lines that will give you the horizontal distance from you to the target and not your actual distance.

For example, if you are 35' up in a tree and a deer is 20 yards (60') from the base of your tree (on flat ground), the deer will actually be 23.15yards from you, but you should still use your 20 yard pin.

Don't blame the angle for you shooting low. Something else was going on there. You either used the wrong pin or your scope is now off, or something.

In other words, if you are at the base of your tree and the ground is flat, you use your 20 yard pin for a target that is 20 yards away. If you climb up 10' up a tree, still use your 20 yard pin. If you climb up 100' up a tree, still use your 20 yard pin, even though the target will look much farther away. If you dig a 100' trench and are standing at the bottom, still use your 20 yard pin.