Run some water out the drain valve and I expect you'll find it hot.
Residential hot water heaters will have BOTH the cold water inlet and hot water outlet located at the top of the heater. However, there has to be some way for the cold water to get to the bottom of the tank to displace the lighter, hotter water above it. Otherwise, when you were to draw hot water, the cold water coming it at the top of the tank would travel directly to the hot water outlet, and you'd get luke warm water (at best) coming out.
That "some way" is called a dip tube, and it's broken on your hot water heater.
A dip tube directs the cold incoming water to the bottom of the tank so that gravity keeps the colder heavier water at the bottom of the tank and the lighter, hotter water at the top of the tank. That way, you get ALL of the hot water out of the tank before it runs cold.
Run some water out of your drain valve and see if it's hot. If it isn't, then maybe your elements aren't working. But, if the water in the tank is hot, and yet you're not getting equally hot water out of the faucets, then your dip tube is toast.