iMac Users - Help No Output to System

I'm coming out of the iMac (iTunes) with Optical Toslink into a Cyro-Parts signal converter (optical to Coax) but nothing comes out on the system end. I'm going into a Krell KAV 300i integrated amp. The optical "out" on the iMac definitely works for headphones so I suspect the signal converter. When the signal converter is engaged the iMac "Sound" page indicates "no output controls". Perhaps you know something that I don't about passing the signal through to the system.
I'm not sure what the cryo-parts signal converter does, but if it's a DAC then you should be fine in that regard to at least get a signal, or does the Krell have an onboard DAC?

Either case, you'll need to go into the "Audio MIDI Setup" application and choose "Built In Output" under the "Properties for" pulldown menu (within the Audio Properties section of the MIDI setup app). Then select "Built in Output" and make sure it shows it's putting out a master stream if it's I-Tunes 8.0. I believe it reads "digital out" if it's I-tunes version 7.5. If the MAC is not sensing a device on the other end of the fiber optic line, it will not put out a SPDIF signal (again, the cryo-parts signal converter could be part of the problem).

Also make sure you have a fiberoptic "minijack" cable that works with Macs and make sure it's plugged in all the way. Other then that, it should work.
Plug the fiberoptic into the minijack and ensure the other end is glowing red. If it is not, then you'll have to enable the optical out as Mb9061 suggested.

Which DAC are you using? The KAV-300 does not have a built in dac, it's an integrated amplifier. A fiber to coax converter merely converts from SPDIF fiber to SPDIF coax, no actual digital to analog conversion is taking place. For that you'll need a DAC.
Many Thanks to Mb9061 and Gherreal for your responses. You have been a big help. Here's what I know (now).

First, when the minijack is plugged into the iMac it does glow red on the other end so we know the iMac is functioning properly.

Second, the MIDI setup application does not show a master stream so, as you stated, the iMac is not sensing a device on the other end. Thank you for that tip, I did not know to look there for a streaming indication.

Third, I did not know that the KAV 300i does not have it's own DAC so therein is most likely the problem. The system is not converting to an analogue signal - no wonder there is no sound!! I do not have an external DAC.

the Cyro-Parts signal converter is not a DAC.

I'll see if I can hook this all up with a friends processor to make sure that it is not the Cyro Parts Box malfunctioning (I doubt it).

As a matter of explanation the KAV 300i was recently purchased to use in a small DVD set-up for movies and works very well for that. That system is here in my Washington State home. The main system that utilizes a Krell HTS 7.1 processor (with DACs) is in our retirement home in Mexico. Since the iMac is new to me and has not been introduced into the main system I wanted to make sure all the components worked before moving it to Mexico where equipment is hard to come by. My best bet is to take the iMac and signal converter to my friend's house for a test.

Thanks again to both of you - It looks like you have me on the right track.