Yes, a digital transfer to your PC is FAR superior to any analog transfer from a D7 through the 1/8" mini jack. Are you looking to transfer old DATs, or is this your first entry into portable recording? The reason I ask is that for relatively low cost, palm sized wave file recorders will do almost everything that D7 can, without the extra cost/hassles of purchasing blank tapes, and allow high speed USB transfers to any PC or Mac.
If you are transfering some buddy's old DATs, this recorder should work for you for that purpose if it's in good shape. My biggest worry about a D7 is that it is at least 12 years old, since the Sony replaced it with the D8 around '96 or so.
But, if you absolutely need to use the D7 DAT recorder:
1. You need to have a digital soundcard on your PC with an SPDIF coax (RCA) input.
2. You need to find either an Oade or Pro-digital modified Sony 7 pin to SPDIF cable. (these can be found here periodically on the Yard Sale section.
Good luck !!!