Sam: Uh, you killed the Tooth Fairy?
Garth: Yeah, man. I mean, not my proudest moment, but it happened.
The Tooth Fairy was killed by Garth Fitzgerald IV in his very first hunt.
Garth tells Sam and Dean he used to be a dentist, and it's where he got his first case as a hunter. Dean mockingly asks if it was the Tooth Fairy; Garth confirms that it was, telling the Winchesters that he felt terrible about it.
Garth reminds Dean that he used to be a dentist when he is about to examine his teeth. Dean recalls that Garth killed the Tooth Fairy, and he replies that "she had it coming."
Tooth Fairy in Lore
The Tooth Fairy is a tradition of Anglo origin, wherein a creature will exchange a coin for a child's tooth when it falls out.