[OddManOut]

Originally Posted by JonPR

The purpose of an altered dominant is to provide maximum chromatic voice-leading to the following chord. Forget about the scale on the chord itself - look at where it's going.

A D7alt chord is almost certainly resolving to Gm or G major. The core of the dom7 (root-3rd-7th) is always present, and those notes resolve as normal: root is a shared tone (5th of G), 3rd and 7th move by half-step (F#>G, C>B, or C>Bb if Gm - the only whole step move). So far, so classical.

The altered 5th and 9th can move as follows:

Ab > G or A (9th of G)
A#/Bb > A or B
Eb > D or E (6th of G)
E#/F > E or - less likely - F# (6 or maj7 of G)

You choose whichever of those (if any) you want, according to where you want your phrase to land on the G, and probably on where you're coming from on the preceding chord.
Another tip is that a 7alt chord is the same as its tritone sub (built from the same notes). D7alt = Ab7#11 (ultimately Ab13#11); only the bass note is different. Thinking "Ab7" helps remember the half-step leading idea.

The "7th mode of melodic minor" is a handy memory aid, IF you know your melodic minor scales. It's also handy for suggesting some arpeggios or pents you can play on the 7alt chord. (Eg, in this case Fm pent, or Ebm arp.) The chord doesn't derive from melodic minor, and - speaking personally - I didn't understand how to use this scale until I realised how the voice-leading worked.

Awesome info! Thank you!