Our Stone Age ancestors used bones and rocks like volcanic glass, known as obsidian, to craft tools and weapons.  Such weapons are hand-crafted axe, arrowhead, and spear blades, as well as knife and macuahuitl blades.  Mesoamerican macuahuitl is a weapon, which is a wooden club embedded with several embedded obsidian blades on 2 sides, like a double-edged sword.  While made of wood, stone or Dragon’s Teeth, those are weapons that could be used by wizards.

Imagine using magical Dragon’s Teeth, and the teeth of other types of monsters, as cutting blades for tools and weapons.  For combat, Dragon’s Teeth blades are considered magical weapons.  Thus, those blades become an inexpensive way to equip magical weapons to henchmen and hirelings.  During my past campaigns as a player, I remember several times when my party’s henchmen and hirelings, as well as player characters, fled or died in combat, because they didn’t have magical weapons to fight monsters that can only take damage by magical weapons.

The peaceful way to obtain sharp dragon’s teeth happens when dragons grow new teeth while pushing out their old teeth from their jaws in each stage of their lives.  The violent way is to take them from dead dragons.  Dragons selling their old teeth could create a new source of tools and weapons for the party, to be used by them or sold to NPCs.

This shows up pretty frequently among players by my estimation. I've had players take down a dragon and immediately want to harvest everything they could from it. My personal homebrew in this situation is as follows:

A Dragon's tooth can be fashioned into any of the following weapons: Javelin, Dagger or Spear. When this work is carried out by a proficient weaponsmith the items have the following stats.

Javelin - 1d8+3 piercing damage plus 1d8 colour damage
Dagger - 1d6+3 piercing damage plus 1d8 colour damage
Spear - 1d8+3 piercing damage plus 1d8 colour damage

For reference, what I'm calling 'colour damage' is basically a placeholder. If the tooth was from a red dragon it would be fire damage, if from a green dragon it'd be poison damage.

Basically I increase the standard damage die by 1, add a +3 to hit and damage modifier, and then add 1d8 of the element from the dragon in question. Seems to go down well enough.

For larger weapons that's where a talented smith will require dragon bones (longswords, etc.)

For smaller and ammunition, I tend to say dragon scales will work well - so 1 dragon scale will make a single +3 to hit, and +3 to damage, with colour damage arrow/bolt/dart.


It's useful having a list of these things because players ask for it that often

I assume you would use items that already exist like Dragon's Wrath Weapon or Dragontooth Dagger or even a Dragon-Touched Focus as templates for something like this. 

Back in 3rd edition, I wrote an article In Dragon Magazine about "Cutting Up the Dragon".

We mostly went with the idea of dragon parts reducing the cost of making similar magic items rather than making new magic items. (Although we did add flying boats made out of entire dragons)

But if you do decide to do something like this, I make the following suggestions:

Scales should not be weapon material, they would make shields and/or cloaks  not ammo.

I strongly suggest you do NOT make everything +3.  Instead I would go with an age based system. Young or older can make +1, Adult +2, Ancient +3.  A failed attempt to make a +3 weapon could result in a +2, or a +1 on a natural 1.  A failed attempt to make a +2 could make a +1 or nothing on a natural 1.  A failed attempt to make a +1 item makes nothing.

In the past, I've treated dragon teeth as non-magical but a very valid material component for someone to enchant into a magical weapon. That helps me integrate it into the existing feel of D&D (things can improve) but does not tie me down to a system that forces specific results. I let the player design the weapon they want.