Yes, the SEAL Pup should lock into the Kydex sheath. It should make a definite snapping sound once you get the knife fully seated in to the sheath. On another not we have finally received the new tactical Nylon sheaths for the SEAL Pup and SEAL Pup Elite. These sheaths are great. I will be posting some images to the website, hopefully today and will add the link to the forums.
Chris