OMG DS! LOL, I have no idea how to handle this one...

Court0026

DS has discovered himself (obv at this point) and is starting to get very comfortable talking about his penis and what is going on with it.  Today at rest time he actually fell asleep (he hasn't napped in MONTHS) and when I went in to check him, he was naked from the waste down.  I slipped the pull-up back on and laughed about it.  When I asked him about it at dinner, he got this funny look on his face and told us that he used the tools and the tool box (he sleeps with his Handy Manny tools) to tickle his penis.  DH was a lost cause because he had to leave the table- he was trying so hard not to laugh.  We have explained many times about time and place with him touching things, but the tools thing was new territory.  Any suggestions?  I am so over talking about penises and he isn't even 3.   We talked about keeping the tools clean and pee and what the tools are for, etc.  DH took him aside after dinner and they talked about not doing that again.  Seriously dying over here.  I want to see if he fits into his 24 month onesies still, but that seems mean.