Press the <A-B> key on the side of the H120 to get to the menu settings and then enter <Recording> menu. Enter <Recordng Settings> Menu -> <Source> menu and choose <Digital>. You know if it has worked if you see the LED from the optical out jack come on (but do not plug it in there, plug it in the jack next to that). If you are still not getting a signal, I am not sure what is up.