I looked up the episode to hear it for myself, and it's pretty obvious what's happening here.
"D-Money" is a goofy nickname. I don't know exactly where it comes from, but I believe it originated in the hip hop world, where money is very important to rappers because of poverty. The (D) is referencing the kid's name, Dylan. It's a little bit poetic; it sounds good because it kind of rhymes. You would normally only use this kind of nickname with other letters that also rhyme, like (Z) or (P), or letters like (J) or (K) because they also sound good. You would only use "H-Money" for someone named Henry or "L-Money" for Larry if you were trying to sound funny because of how bad it sounds.
The phrase he uses is similar; it's all about how it sounds. Each major word in the sentence rhymes: chillin', Dylan, villain. It comes from a rhyming phrase young people sometimes use. One person says, "What's up, man?" and the response is something like, "Nothin', just chillin' like a villain." It doesn't mean anything to do with villains at all. It's used only because the rhyming sounds good. So the dad character in the show is spinning this around a little bit to try to "sound cool" to the young kid named Dylan. You can see Dylan's reaction because he definitely doesn't think it's cool =)