Eng? Laptop Optical Out

Brief summary of the problem:

I have tried two laptops which the manufactorers described as having a potential 3.5 headphone out that doubles as a SPDIF out.  After checking the SOUND option from the control panel, there's the Realtek Digital Output, so I assumed that the laptops do offer SPDIF out.

I've tried using a minitoslink-to-toslink converter connected to the laptop HO jack and set the Digital Output as the default device.  From what I could see, the bar (volume?) was flunctuating in a way that resembled my potential music out, but if I were to look at the plug at one end, there's no red light/DAC does not "see" a signal.

Is there a step that I am missing?

Thanks

PS it might be helpful to note that they are both running on Windows Vista

Okay I've tried a few new things and I'll post some observations and additional information:

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Laptop: HP Pavilion DV8500

DAC: Entech Number Cruncher 203.2 (Only accepts signal of 44KHz)

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The laptop that I am concerned with has two headphone jacks and I've tried using both.  If I use winamp to play music files, there is no "digital output" meaning that the speakers play and the volume bar from Control Panel->Sound->Realtek Digital Output does not change.  I checked with foobar and when playing the same files, the digital output changed and the speakers seemed to be "off".  I use Foobar as my point of reference.  

If I plug in a pair of headphones to say jack one and the SPDIF cable in jack two or vice versa, there is no sound from the headphones (digital output is "playing?" though, again from CP->Sound).  Unfortunately, there is no red light and after updating the driver software (added a Realtek High Definition Audio shortcut in the Control Panel), nothing really changed.  I've set the primary device in Foobar to Realtek Optical, and I can't get a signal.

Further Tests:

Connected DAC+Cable to Computer Optical Out, Functions well

Thanks for your response by the way~

Bummer, I guess I might as well try.