XDF is the format used for OS/2 installation floppies, a format and technique licensed by IBM
The interesting thing about pcdos 7 is that the disks are in XDF format - IBM Extended Density Format - Wikipedia
(The above image from HxC2001, a firmware for low level disk emulation. One can get similar images from Greaseweazle)
More details on the format here:
The XDF Diskette Format | OS/2 Museum
An amusing and unexpected detail on the formatting process - for reasons, formatted using 39 sectors of 128 bytes, but with sector headers saying otherwise. When those sectors are written to at their proper size, the data overwrites several 128 byte sectors.
From Fdutils documentation:
XDF’s sector arrangement allows it to read sectors alternatively from both sides, i.e. the first sector from side 0, the second from side 1, and the third from side 0 again. This differs from the usual formats, where first the entire side 0 is read, and then the entire side 1. This technique allows to read both sides of a disk in roughly three rotations.
(via danielj on stardot discord)