Although I have an A/V system I do still listen to a lot of music, with it mainly coming from my computer via a coaxial lead straight into my amplifier. Would I make any improvements using a dacmagic or similar external DAC as opposed to using the onboard one in the amplifier?
You should definitely hear improvements. Your receiver is a decent one and if you use lossless files straight to the DAC, it might be very good. I would try buying the DacMagic on trial if possible. If not, you will be able to sell it for only a little less if you are not happy.