In 'DL' mode the offset computer is not in circuit and is not relevant. The flight instrument display shows range and bearing from the selected TACAN beacon.
In 'TAC' mode, the origin of the selected TACAN beacon is 'shifted' to the range and bearing selected on the offset computer. So if your TACAN beacon was at Valley and you selected, say, bearing 320 and range 20 (remembering to select TAC!), you would now have a virtual TACAN beacon at 320/20 from Valley.
Brilliantly simple system - why oh why wasn't it fitted to the Hawk though?