Direct vent direct vent and power vent fireplaces typically vent out the exterior wall but there are units that can make significant vertical runs which again allows for venting through the roof.
How to add a fireplace to an interior wall.
It starts at the fireplace and zigzags through the walls up down over or under ending at a termination point on an external wall.
This type of fireplace can be installed anywhere a chimney can be installed which allows the homeowner to consider installation along an interior wall.
In two story houses choices for placing the fireplace might be more limited but often you can find the 12 to 14 inch space the chimney requires by enclosing a corner of a room or a spare closet.
For most common house designs this means that the fireplace and chimney should be located on an interior wall rather than a perimeter wall.