Not Getting DC al Fine right.

I read the manual and searched the forum but I still don't have DC al Fine working.
Attached is a short demo of my problem.
What I expect is to play measures:
1 - 2 - 3
1 - 2 - 3
1 - 2
D.C. al Fine at end of measure 3
Fine at end of measure 2
measure 3 set to repeats=2
What I get is
1 - 2 - 3
1 - 2 - 3
1 - 2 - 3
D.S. al Fine goes back to the start OK but Fine is ignored.
What did I do wrong?