Snapping to objects in 2004

This kind of ticks me off. In MX if you drew a line close to an edge of a square or something like that, it would snap to the edge so you wouldn’t have to zoom in and adjust it manually. Now in 2004 I think the feature is broken. Basically I want a line that I’m drawing to snap to other lines and corners if I get them close. The Snap to objects button is pressed and I’ve tried playing with the drawing preferences but to no avail. Anyone know a solution?
Here’s an example. I want this line to snap to the corner when I get close. But well it doesn’t. It used to do that in MX.