The most common and most likely answer to this crossword clue is the 7 letter word CLOTHED
I've seen this crossword clue in The Daily Telegraph
C
L
O
T
H
E
D
More clues leading to the result CLOTHED
Buddy explains!

The straight part
We know that "dressed" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case dressed = clothed.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does CLOTHED mean?
CLOTHED verb- To adorn or cover with clothing; to dress; to supply clothes or clothing.
- To cover or invest, as if with a garment.
- Wearing clothes or clothing.
- Covered with a cloth.