As I described above, I am using a coaxial cable from my Sony BDP-S6500 Blu-Ray player to the MD M1 DAC. It sounds great.
My next step was to improve the audio from my TV. I tried the optical (Toslink) output from my Pioneer TV to my Musical Fidelity M1 DAC but discovered it does not work. Since I am using HDMI from my cable box to my TV, the optical output signal is blocked. Pioneer said there is NO digital signal if HDMI is used for the inout.
I then noticed my TiVo Cable Box has a optical digital output connection (Toslink). I connected my Wireworld Supernova 7 Glass Toslink cable from my cable box to my Musical Fidelity M1 DAC and it worked. Well, not exactly. I had to change my TV audio settings to PCM output and then it worked.
The sound is much improved from using my cable box RCA's to my Ayre AX-7e amplifier. I am running a balanced cable from my M1 DAC to my balanced Ayre AX-7e amp. The MF M1 DAC has four inputs for source inputs.
If you are looking to improve the audio sound of your TV, you might want to check your cable box and see if it makes sense to use a digital output to a DAC.