writing to wp database to insert users from 3rd party app – password encryption

Hello, I have searched everywhere for an answer to this question.
I am writing a plugin for aMember. I will be using aMember to manage all my blogs paid members. aMember needs a plugin that will let it write to the wordpress database. the problem I have is taking the plain text password from aMember and writing it into wordpress.
I am unsure how to correctly convert it from plain text to md5 with the secret key. I have read about “salted passwords” but I am still unsure.
I know how to do it with md5 alone, but not using md5 and the secret key.
I assume that the secret key is added to the password before encryption using md5 but I dont know if this is correct.

Thanks in advance for your advice.