Thank you ladies for you responses.

I have tried a regular potty chair but DS is huge (41 inches tall) so he actually doesn't fit. I mean, he can sit on it but none of the urine will go INTO the potty...:-)
That is why we are dealing with the toilet.

The whole alligator thing. He has an incredibly vivid imagination and makes up stories easily. I am assuming he gets the alligator idea from seeing alligators around here from time to time. (We are in Florida.) I will try to explain the alligators not being in toilets. Good idea.

So far I was somewhat ignoring it, trying not to talk about it in hopes he would let it go. But he is not an easily distracted child so I think perhaps explaining would be better.