Hi Russell,
Every time I look at this again it makes my brain ache... For the pics I did above BTW, I did reduce the cut to 1.25mod (i.e. 1.25mm), it reduced the "pit" but didn't eliminate it.
So, attached is another pic of the cutter sketch.
The four dotted lines, starting with the top one are:
- My maximum depth of cut (note the triangular peak marked 3.41 - that's the theoretical DOC if the cutter were infinitely sharp)
- The next dotted line is the PCD (point where tooth & gap are equal, exactly half of the absolute maximum DOC, 4.32mm approx)
- The third dotted line is the outer edge of the gear blank, and represents the point where I stop cutting
- The fourth and final dotted line is the bottom of the cutter (=bottom of the rack).
Now... according to Helicron's site, the total DOC should be 3.41mm based on a 2.16 + 1.25 cut. But I'm not cutting as deep as 2.16, is that a problem??
Thing is, if I go full depth (i.e. the full (theoretical) 3.41mm cut, I end up with vampire teeth (pic 2)...?

A bit more information:
Gear blank is 50.5mm diameter (increased to 52.32mm to account for the increased DOC)
I'm "cutting" a module 1 gear, so 48 teeth.
20 degrees pressure angle.