i usually just put em out in a small cup that was used for like flowers at the store it has the holes in it at the bottom.. you need holes for drainage.. i put em bout half a finger into the dirt and i usually dont fert till its about 6 in or so and i start with 1/4 dose and go up gradually as i see it can take it... i accidentally watered one of my seedlings with my fert water the other day and it burnt it pretty bad.. also.. to me that looks like it might be the result of a bug attack.. or could be cuz the seed shell didnt fall off in time..