Old Minelab XT17000 (1998 model) won't discriminate

[ARROW1]

I have been given the above VLF detector and am attempting to figure out its operation. And YES I do have the manual and have read it repeatedly. But when the unit is set to "Full Discrimination" (knob is fully clockwise), the tone I receive from a rusty nail is identical to a silver dollar - no discrimination is occurring. I am expecting no tone from the ferrous item. Am I doing it wrong? What else might I need to do to fully discriminate junk. Other than that it works great! Thank You