The Seventh on the Leading Note
Diatonic leading-tone seventh chords are built on the seventh scale degree of the major, harmonic minor, and ascending melodic minor scales. In major keys, the quality of the chord is diminished-minor (dm) being a diminished triad to which has been added a minor seventh. Diminished-minor is also known as half-diminished. In minor keys, the quality is diminished-diminished (dd), but the name is usually abbreviated to diminished or fully diminished.
The seventh on the leading note provides a good alternative pre-dominant chord to the supertonic or subdominant, the seventh falling nicely down to the root of the dominant itself. Other viable pathways of progression are to the mediant seventh or even the tonic chord itself
Leading-tone seventh chords are represented by viiØ7 and viio7 in Roman numeral analysis. Both are associated very closely with the dominant seventh chord because they have three notes in common with the V7. Also this is due to the presence of the dissonant diminished fifth, which imparts to those chords in which it is present a restless sense of instability.
Composers frequently substitute leading-tone triads and seventh chords for the dominant in the interest of variety and diversification. Since V7, viiØ7 and viio7 all represent dominant harmony, composers intermixed them freely. This is particularly true for the subtle half-step fluctuation between viiØ7 and V7.
Progressions from viiØ7 and viio7
Like the dominant seventh, with which they share three common tones, viiØ7 and viio7 usually resolve to the tonic (I or i), either directly (a–b) or through the dominant seventh (c–d).
Resolution of Tritone and Seventh Factors
The fully diminished seventh chord (viiØ7) contains two diminished fifths, which tend to resolve inward. If both are resolved, the result will be a doubled third factor on the tonic chord (a), but composers often prefer the normal doubling (b).
The two tones in the leading-tone seventh chords that are nearly always resolved are the root of the chord (the leading tone), which moves upward to the tonic note, and the seventh factor, which resolves downward by step.