Originally Posted by grumpus

I'd start by getting it somewhere near straight using vise grips or a crescent wrench, so you can limit the major bending to the mid/upper part of the hanger; if it was a bare frame I'd use a bench vise. It looks like you might need to close the dropout a little too: in that case the bench vise would definitely be my preferred tool. Then finish it off with the alignment tool. Make sure you screw it in firmly, and that it lies flat against the hanger. Tweak a little bit, check against the wheel in three places, repeat as required.