It would be hard if not nearly impossible to properly follow up TSCC 1×06 Dungeons and Dragons and while The Demon Hand s1e07 is not nearly as strong an episode as D&D was, it makes for a good lead in to the season finale and hopefully not the series finale of The Sarah Connor Chronicles, setting the different elements in play. From Derek Reese and Cameron both operating on their own hidden agendas to the contrast between Cameron and Sarah Connor and the difference between having a soul and not having a soul, The Demon Hand sets up some interesting blocks that the finale will either build up or tear down.
Going further in exploring and in the process creating a canon for Terminator that most never even really knew it had, The Demon Hand brings back Sarah Connor’s psychiatrist from Terminator 2, Dr. Silverman, as a reborn fanatic who has mixed the Terminators together with the Book of Revelations to produce some quasi cultic belief system that treats Sarah Connor as Jesus. Of course by calling the apocalypse wrought by Skynet, Judgment Day, Terminator was always asking for a religious interpretation and Silverman seems to suggest that there are more like him out there.
Meanwhile Cameron seems to be following her curiosity about humans while coldly manipulating the Russian ballet teacher and her brother and then leaving them to die when she got the information she needed. And yet the closing of the episode that has her slowly performing ballet routines in seeming search of the language of the soul is a disturbing reminder that she has aspirations to be human with none of the human compassion and empathy that Sarah Connor demonstrated when she saved Agent Ellison from the fire, even though he had been hunting her.
As an interesting side note, Demon with a Glass Hand was one of the Outer Limits episodes that Harlan Ellison claimed inspired Terminator.