I have been reading about the Optional type in Java 8. I want to implement in some of my Android code.
But does the Dalvik machine for the latest versions of Android
I don't think you can do it now or in near future. As you can see in here Android start listing Java 7 as a requirement since Android 5.0 that was released at Nov 2014.
That is 3 years after Java 7 first release, so maybe we can use Java 8 from 2017 ;)
On another note you can use lambda using retrolambda to support lambda in Android dev which is really nice.