Husband has sore between pinkie toe and next one, hurts, bleeds some, when i was cleaning it i noticed a small hole right in the crease and peeling skin.

This could: Potentially be serious particularly if he has diabetes or poor circulation. There is often a soft corn there fungus and or bacteria. It is important to remove the soft corn as the worse that gets the deep an ulcer can get. I strongly advise against self treatment and would recommend a foot doctor to care for this. Sometimes, if conservative tx fails a surgery is indicated.