Photoshop's ability to open DNG image files relies on Adobe Camera Raw (ACR), a plug-in which must be placed in a specific sub-folder so Photoshop can find it. However, no version of ACR currently available from Adobe will work on Photoshop 7 which means PS7 can't open or edit any raw files. You would need to upgrade to Photoshop CS3 or CS4 to make use of the ACR plugin. Photoshop Elements (new version) is also compatible with the currently available ACR plug-in but you need to check Adobe's ACR pages which tells you which version of ACR is comptible with which version Photoshop or Elements. But PS7 is definitely no use as far as RAW/DNG work is concerned because current ACR versions don't support it.