David Mahon (45) was also worried about his partner, Audrey, Dean Fitzpatrick's mother, telling gardai that her son's death was going to kill her.
"I thought that when Amy went missing (it) was the worst thing in the world and now this. How am I going to face Audrey", he said to gardai during interview.
Mr Mahon, of Ongar Village in Clonsilla, has denied murdering 23-year-old Dean Fitzpatrick on May 26, 2013.
Mr Fitzpatrick is the brother of Amy Fitzpatrick who went missing in Spain in 2008.
The father-of-one was stabbed to death outside Mr Mahon’s apartment at Burnell Square, Northern Cross in Malahide.
The Central Criminal Court heard that Mr Mahon was formally arrested by Detective Sergeant Eddie Carroll at 1.45pm on May 26, 2013 at Coolock Garda Station and was detained for questioning.
Mr Mahon told gardai during interview that his stepdaughter Amy was "an angel but Dean was no angel".
He said Dean was always pulling knives on him, and he once pulled a gun on him, but he was never afraid.
Mr Mahon admitted he once hit Dean but that was "in Spain years ago".
He said he and his partner Audrey were "millionaires in Spain" but they spent all their money looking for Amy, and he had to ask his dad for the money for the flights home.
Mr Mahon told gardai that Mr Fitzpatrick had called up to his apartment on May 25 and the pair were arguing, with Dean saying "you don't care about your grandson". He told him to go away.
He said Mr Fitzpatrick pulled a knife on him in the kitchen, but he grabbed it off him and put it in his back pocket.
Mr Mahon said Dean then told him "I'll f*ck you up", and he was embarrassed that his friend John McCormack heard this.
He said Mr McCormack took Dean out of his apartment onto the hallway, and he followed them.
Dean was roaring and shouting, he told gardai.
Mr Mahon said he asked Dean "why are you pulling a knife on your auld fella".
He said Mr Fitzpatrick walked into the knife, and he knew he nicked him, but Dean ran off and he "didn't think it was that serious".
Mr Mahon added: "I can't believe he's dead. This will kill Audrey. She took an overdose before".
He also told gardai he was "not a violent man" and that Mr Fitzpatrick "walked into the knife", saying "I'm starting to doubt myself, did I push him".
He also told gardai: "He's a little b*****d but I wish it were me dead".
He said that "part of him thinks he wanted it", adding that Dean "walked into the knife".
The accused said Mr Fitzpatrick had self-harmed in Spain, and "he seemed to enjoy it".
Mr Mahon said he "never thought he'd killed him" and if he'd realised how serious it was he would have called an ambulance.
The jury also heard that Mr Mahon then left the apartment and he got into a taxi with his friend Karl O'Toole.
He said he threw away the knife, "don't ask me, I don't know why".
The jury is continuing to hear Mr Mahon's interviews with gardai.
Yesterday, the Central Criminal Court heard from Deputy State Pathologist, Dr Michael Curtis who said that Dean Fitzpatrick essentially bled to death as a result of a single stab wound to the stomach.
Dr Curtis said the stab wound was approximately 14.5cm in depth, but accepted it could have been as little as 12.5cm.
Despite emergency treatment, Dr Curtis said the injury was essentially non-survivable.
Dr Curtis also said that in this case he could not distinguish between a "run on", which he described as when an injured person advances and comes onto a knife, and a deliberate thrust of a knife.
Cross examined by Sean Guerin SC, Dr Curtis also said there was no evidence of twisting of the knife, nor was there any lateral movement or "slicing" of the knife.
Mr Guerin said it was suggested in the prosecution's opening statement that Mr Fitzpatrick had suffered a "gutting", but Dr Curtis agreed that what "Mr Fitzpatrick suffered was not a gutting".
The trial continues before Ms Justice Margaret Heneghan and a jury of six men and six women.