Usign iMac as a Display for MacBook Pro
Ok got it working:


turn off both devices.
connect them with thunderbolt cable
turn on MacBookPro AND keep holding the "T" key on its keyboard. You will see it will go to a disk mode with some thunderbolt icon showing on its screen.
Turn on your iMac AND keep holding the OPTION key on its keyboard. You will see it will show you some hard disks on the display. Pick the one that is for the MacBookPro.
Done! Now Nothing from iMac is running in the background, iMac's peripherals are working for MacBookPro AND EVEN better: you are using CPU Power and RAM of your iMac to run MacBookPro. 


NOTE: to turn off, don't just unplug the thunderbolt cable, first shut down the computer, then unplug the cable.