Velocity updates have been proven to be important for constraining motion-sensor-based dead-reckoning (DR) solutions in indoor unmanned aerial vehicle (UAV) applications. The forward velocity from a mass flow sensor and the lateral and vertical non-holonomic constraints (NHC) can be utilized for three-dimensional (3D) velocity updates. However, it is observed that (a) the quadrotor UAV may have a vertical velocity trend when it is controlled to move horizontally; (b) the quadrotor may have a pitch angle when moving horizontally; and (c) the mass flow sensor may suffer from sensor errors, especially the scale factor error. Such phenomenons degrade the performance of velocity updates. Thus, this paper presents a multi-sensor integrated localization system that has more effective sensor interactions. Specifically, (a) the barometer data are utilized to detect height changes and thus determine the weight of vertical velocity update; (b) the pitch angle from the inertial measurement unit (IMU) and magnetometer data fusion is used to set the weight of forward velocity update; and (c) an extra mass flow sensor calibration module is introduced. Indoor flight tests have indicated the effectiveness of the proposed sensor interaction strategies in enhancing indoor quadrotor DR solutions, which can also be used for detecting outliers in external localization technologies such as ultrasonics.