z axis cut depth

Can any one help me set the cut depth in Kcam?
I am trying to engrave a piece of MDF 3/4 thick. I move the cutter
to touch the mdf then zeroed all the axis. I have the travel set
to .125 and cut depth to .035 since that is 1/2 the diameter. It
will move up the .125 to the start position then start cutting in
the air not into the mdf. I have in the set up moved the cut depth
up and down and it does the same thing? cutting the pattern in the
air?

Thanks Clint