Any external DAC can be connected into an analogue input of your AV receiver - essentially, rather than plugging your digital source direct into your AV receiver, you plug it into the DAC's digital input instead (in your case, the optical output on your Mede8er will do), then a pair of standard analogue cables connect the DAC into your AV receiver. Switch your AV receiver to the input you've connected your DAC to and you're set.
Whether you'll hear an improvement depends on the DAC and your own preferences - I suggest you do some trials / home demos from a dealer who will allow you to so you can judge for yourself.