2000 rpm = 33.33 Hz

therefore 1 rev takes 1/33.33 or 30ms

At the diameter you are using, the circumference is 2.875" X PI = 9.03"

your slot is .125" = .125/9.03 x100 = 1.38% of the circumference.

So your slot is visible for .0138 x 30ms = 0.414ms or 400uS

You need to ask CNC4PC what is the rise and fall times of their index board, not just the opto sensor.

Then, for Mach3 to be able to see the slot it needs to be sampling at around twice the frequency. 1/400uS x 2 = 5000Hz

So with mach at the lowest kernel speed of 25KZ, sampling the slot is not the issue. My assessment is that the slot is not wide enough and that the pulses exiting a the index board are non existent or too narrow.

You could make the slot wider to solve the problem or ask the manufacturer why it doesn't work.

Peter.