USB audio out not getting to DAC

Just set up my Macbook late 2007 OS 10.7.5 to a Denon DA-300USB DAC.
I'm successfully playing files out of JRiver Media Center software via Mac's digital audio out through an optical audio cable. But optical audio has limitations on bitrate, only to 24-bit/96khz.
I want to use higher rates and have some higher res files. The DA-300USB can process up to 24/192 and DSD files using USB.
When I connect the DAC using USB and power on the DAC, the sound preference pane adds the option "Audio Out High Speed USB," which is what I select. This indicates the computer is seeing the DAC.
But when I play a file, the DAC display reads "unlock," meaning it's not receiving audio. And the sound plays through the internal speakers, Ugh!
Denon says no driver is needed for this device -- indeed the computer does detect a USB audio connection when the DAC is on.
Is there something I'm missing?

According to Crutchfield, this DAC can only process ALAC up to 96 kHz.  Can you get lower res files to play using the USB connection?

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