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It is not toxic to pets.
Here is a link with more information.

https://www.extension.purdue.edu/extmedia/bp/bp-111-w.pdf

This can be caused by numerous pests.
This article will help you.

https://www.gardeningknowhow.com/lawn-care/lgen/lawn-and-garden-holes.htm

These links will help you.

https://www.gardeningknowhow.com/lawn-care/lgen/brown-lawn-fixes.htm
https://www.gardeningknowhow.com/lawn-care/lgen/reasons-for-dying-grass.htm

This article will help you.

https://www.gardeningknowhow.com/lawn-care/lgen/dog-urine-grass.htm

Watering is key to new sod establishing a root system, but over watering can also be an issue.
Over watering can cause the roots of the sod to rot. During the first week after laying new sod, look under the sod at the roots. If they show signs of rotting, you may be using too much water or watering too frequently. New sod requires daily watering, and sometimes, you may need to water more than once a day to prevent the soil from drying.
Immediately after installing the sod, and until it takes root, water the sod to moisten the top 1 inch of the soil underneath. Once the sod has begun to establish itself in the soil, reduce the number of times you water, but with each watering session, you need to make the soil damp down to 6 inches below the surface.

https://www.gardeningknowhow.com/lawn-care/lgen/reasons-for-dying-grass.htm

It is difficult to say, with this description.
You could have rodents, insects, snakes, worms or even birds causing holes in the soil.

You could check with your local County Extension Office. They may be able to help identify something specific to your area.
Here is a link to help you locate the nearest office to you.

https://www.gardeningknowhow.com/extension-search