German city doctor needs to reform (7)
I believe the answer is:
dresden
'german city' is the definition.
(Dresden is a city in Germany)
'doctor needs to reform' is the wordplay.
'doctor' becomes 'Dr' (abbreviation).
'to reform' indicates an anagram (letters in a new form).
'needs' anagrammed gives 'esden'.
'dr'+'esden'='DRESDEN'
(Other definitions for dresden that I've seen before include "Fine china named after German city" , "Type of china" , "Saxony capital" , "Decorated china" , "German city, noted for its porcelain" .)