Help interfacing to pulse encoder RH-P144AJ/8-30

Alright, I think I understand what you are saying.

Just so I have this clear on the wiring (forgive the crude drawing):

Encoder         Arduino             Power
V --------------------------------- +12v
C ----------\                        N
Gnd --------+-- Gnd --------------- Gnd
Output --+----- Digital In
         \-3k3- 5v

Thanks!