Depth-of-field extension and accurate 3D position location are two important issues in digital holography for particle characterization and motion tracking. We propose a method of locating the axial positions of both opaque and transparent objects in the reconstructed 3D field in the wavelet domain. The spatial-frequency property of the reconstructed image is analyzed from the viewpoint of the point spread function of the digital inline holography. The reconstructed image is decomposed into high- and low-frequency subimages. By using the variance of the image gradient in the subimages as focus metrics, the depth-of-field of the synthesis image can be extended with all the particles focalized, and the focal plane of the object can be accurately determined. The method is validated by both simulated and experimental holograms of transparent spherical water droplets and opaque nonspherical coal particles. The extended-focus image is applied to the particle pairing in a digital holographic particle tracking velocimetry to obtain the 3D vector field.