How to find circles in an image

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Hi in the below image how do you find and mark all the circles and identify the defect, my vs is vs2010 and opencv 2.4.10

this is my code so far, but it doesnt detect anything:

static void findCircles2(const Mat& image)
{
    vector<Vec3f> circles;
    int thresh1 = 5;
    Mat pyr, timg, gray0(image.size(), CV_8U), gray;
    pyrDown(image, pyr, Size(image.cols/2, image.rows/2));
    pyrUp(pyr, timg, image.size());
    for( int c = 0; c < 3; c++ )
    {
        int ch[] = {c, 0};
        mixChannels(&timg, 1, &gray0, 1, ch, 1);
        Canny(gray0, gray, 0, thresh1, 5);
        //dilate(gray, gray, Mat(), Point(-1,-1));
        gray = gray0 >= (1)*255/N;
        gray = gray0 >= (2)*255/N;
        gray = gray0 >= (6)*255/N;
        namedWindow( "Hough Circle Transform Demo 1", CV_WINDOW_AUTOSIZE );
        imshow( "Hough Circle Transform Demo 1", gray );
        waitKey(0);

        HoughCircles( gray, circles, CV_HOUGH_GRADIENT, 1, gray.rows/8, 200, 100, 0, 0 );
        cout<<"size of circles: "<<circles.size()<<endl;
        for( size_t i = 0; i < circles.size(); i++ )
        {
            Point center(cvRound(circles[i][0]), cvRound(circles[i][1]));
            int radius = cvRound(circles[i][2]);
            circle( gray, center, 3, Scalar(0,255,0), -1, 8, 0 );
            circle( gray, center, radius, Scalar(0,0,255), 3, 8, 0 );
        }

  /// Show your results
        namedWindow( "Hough Circle Transform Demo 2", CV_WINDOW_AUTOSIZE );
        imshow( "Hough Circle Transform Demo 2", gray );

         waitKey(0);

    }
}