Raymond Goodwin, 35, told the horrified family: 'It's the last time he will ever wind me up,' Nottingham Crown Court was told. Mr Goodwin, a quarry worker, chopped off his father's head in the sitting room after stabbing him with a poker, said Richard Inglis, for the prosecution.
As he climbed over the fence to show the head to his brother-in- law and sister, Leslie and Linda Gregory, he dropped the head and Linda's 15-year-old son Dean recognised it as his grandfather's.
Mr Inglis said Raymond killed his 73-year-old father, Eric, in the aftermath of a row over the son's noisy Jack Russell dog Charlie eight months earlier.
His father had complained about the noise the dog made, so 'Raymond killed his own dog and buried it in the garden. But he blamed his father for what he had done.
'It was plain that the death of the dog rankled on Raymond's mind and he was thinking about it when he killed his father,' said Mr Inglis.
Mr Inglis said Raymond had lived with his father in Wirksworth, Derbyshire, but left home after the dog's death, eventually moving in with his 42-year- old sister next door.
On 31 May last year - Bank Holiday Monday - he drank 12 cans of strong lager. 'Past events were laying heavily on his mind. He was thinking of what had happened to his dog and his hatred of his father,' said Mr Inglis.
'By 9pm he had worked himself into a frame of mind to go and pick a quarrel with his father, who had also been drinking.'
He went next door and his sister and her husband heard sounds of a violent struggle with furniture being tipped over.
'Raymond stripped to the waist and gave his father a beating. Raymond is a strong man - a 13-stone quarry worker.'
Mr Goodwin picked up a poker and struck Raymond in the middle of the chest so that the point went in two centimetres.
'Raymond took the poker off him. His father was felled on to a chair. Raymond stabbed him with the poker causing a fatal injury,' said Mr Inglis.
'It passed through his body and came out of the back. It was then withdrawn and rammed in again through the father's body at least twice.
'It broke through his ribs and came out bent. But still Raymond's anger was not satisfied.
He went into the kitchen to fetch Mr Goodwin's woodsman's axe. 'His father was lying dead or dying with his head on the hearth. With several blows he cut the head from the body.'
He then put it in a plastic bag, climbed over the fence and showed it to the shocked family next door before taking it to show Alexander Tomlinson, a neighbour.
Raymond, who was soaked in blood, told him: 'I have done it. I have finished him.'
He waited until police arrived before handing them a rucksack and the plastic bag. He told them: 'Here is my bag and here is his head. Yes, I have done it. He has had it coming for a long time.'
Raymond, a bachelor, has pleaded not guilty to murder.
Leslie Gregory told the court that Raymond told him: 'I have sorted it out. He will not hurt me or Linda ever again.'
Mr Gregory said Eric Goodwin was very aggressive to the whole family, including their three children aged 15, 13 and 10, and would also 'take a swipe' at other children he met in the street.
Linda Gregory told the court that her father had injured herself, her mother, Hannah, who died in 1990, and her brother. On one occasion her fatherhad hit her brother with a frying pan. He also stabbed him with a knife in the arm.
The trial continues today.