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He says that they build houses out of the teeth for themselves and all their fairy friends.
Whatdo you guys think those silly tooth faries do with the teeth they pay for (going rate is $1 in our house)?
No matter how fast he ground the teeth into fairy dust the pile of teeth never got smaller. Instead, miserable old Garreth, the taskmaster would just snarl and tell poor Terrence how slow he was. And then, before walking away, as always, Garreth would mutter under his breath,
"Yep, poor old Terrence, dull-witted and slow to boot, nothing like his brother Timothy, ah, if only Timothy had never wandered off into the world of the big people".
<added> I haven't written any more, but the question begged at least the beginning of a story ;)</added>