Make sure that the digital output from the TV, DVD/BD player, Sky box (or any other source) is set to two channel PCM and not other outputs such as Dolby Digital, multichannel, bitstream etc.
With the corresponding input source selected on the DacMagic 100, the "Incoming Sample Rate" LED lights should be on and will indicate the digital sampling frequency.
NOTE! For 32kHz no LED will be lit, but the DacMagic 100 will still operate.