It takes place in a world without time. So you can't fit it chronologically into the game at any point. However, if I must try, I'd say it falls between the opening sequence and the final boss. If you select it ingame, the game warns you that it contains major spoilers. It's best to leave till post-game before you try it (on your first playthrough). Don't worry, unlike the other DLC monsters, this one is worth getting postgame.
It takes place in a world without time. So you can't fit it chronologically into the game at any point. However, if I must try, I'd say it falls between the opening sequence and the final boss.
So, basically it could be taking place at any point in the game.
It has spoilers, though not... really... that great of a one? But maybe I'm desensitized with spoilers. Overall, don't do it unless you have beaten the Final Boss once and have seen the Ending. Once you've done that you can play it just fine. Nice thing is, on consecutive playthroughs you could play it as soon as you reach Chapter 2 and could have a supremely overpowered Monster in your party.
"If sense were common, everyone would have it." The gamer who dislikes FF VII, OoT and similar and isn't afraid to admit it
It has a MAJOR Spoiler which shows you what happens at the end of the game. You should DEFINITELY play the DLC and but skip all the cut-scenes. That way you benefit by gaining her monster crystal, playing through an awesome battle with caius, but by skipping scenes, you'll avoid spoilers.