Kelly Osbourne -- How Her New Dog Got So Damn Small!!!

Kelly Osbourne’s new Teacup Pomeranian doesn’t crap gold -- despite its $11,000 price tag -- but it’s still the best bang for your buck, according to the breeder.

Betty Pedram, who owns Betty’s Teacup Yorkies flew into LAX Thursday with Kelly's brand new 5.1 oz. mini-dog -- and when you see the amazingly tiny animal ... only one question comes to mind: HOW THE HELL DID THAT THING GET SO FREAKIN' SMALL?

That's what our photog asked ... and Betty dropped some knowledge. Check it out ... let's just say for males of this breed ... size does NOT matter.