Dennis made his move on the last of six times up the Bridge Valley Road climb on the circuit in Bristol.
The attack followed the peloton's catch of a four rider break which included Andre Greipel.
Combined with his second place behind Tony Martin (Etixx-Quickstep) on the stage's earlier 15km time trial, the gutsy move with the bunch bearing down on him put pressure on race leader Cummings.
Rohan Dennis celebrates his stage 7 victory at the 2016 Tour of Britain (Getty) Source: Getty
"Coming into the second part of today I wanted to go all or nothing," Dennis said.
"But at the beginning of the race I wasn't feeling too keen to go for it but when you get towards that point and everyone is fighting and the team is pushing you up and you feel like you have the legs, you tend to switch on mentally and that's when I started to play it by feel.
"When Dumoulin slowed down a bit (after an acceleration before the final climb) I thought now is the time to attack and thankfully I was able to hold on to it."
But despite this, the Australian is still not optimistic about his chances of taking the overall on the final stage.
"To pick up 26-seconds it means I'd have to go off the front and win the stage, and with at least four teams there that would want it to be a bunch sprint that's pretty unlikely to be honest.
"The first plan will probably be just to make sure we don't lose second and then if there is an opportunity to take time off Steve then I'll take it, but with his team it'll be tough they're pretty experienced and riding the front and closing down anything that's dangerous.”
In the time trial, Tony Martin claimed Etixx-Quickstep's 50th victory of 2016.
Tony Martin (Etixx-Quickstep) wins the 2016 Tour of Britain time trial on stage 7. It is the team's 50th victory of 2016. (Getty) Source: Getty
“To be sincere, I wasn’t expecting to go so fast, because it’s been a hard week for us, but sometimes when you don’t expect a good performance you do even better," Martin said.
"The world’s best time trialists are here and to beat them so close to the World Championships in Qatar gives me a boost of morale and makes me really happy.”
"The course was really nice, but the weather and the rain made it slippery and dangerous, especially as you had to fight for every second and give it your all in the corners. Fortunately, I did a good recon before the start and knew what were the tricky points of this route and how fast I could go."
