Green’s Dictionary of Slang

1. (orig. US) excellent, wonderful .

1938		Flash! (Wash., D.C.) 21 Feb. 11/1: killer diller — Favorite expression of musicians when one of their tunes appeals to the ear in an unusual manner that has a tendency to cause excessive jubilance among the dancers and listeners.
1946		Memphis Minnie [song title] Killer Diller Blues.
1964		R.S. Gold Jazz Lex. xxiii: Although some were of the merely ebullient variety (e.g., killer-diller: an extraordinarily good musician or piece of music), characteristically the jazz phrases were formed by semantic association.
1983		J. Sullivan ‘Thicker than Water’ Only Fools and Horses [TV script] He wears fresh trousers, one of Del’s killer-diller shirts.
1987		(con. 1968) Bunch & Cole Reckoning for Kings (1989) 279: Back home I drove a Vette [...] Had me a killer-diller car.
1993		(ref. to 1937) R. Firestone Swing, Swing, Swing 179: The Big Broadcast of 1937 was the third in a series [...] spotlighting some of the popular radio personalities of the day [...] The Goodman band can be seen [...] racing through Jimmy Mundy’s killer-diller rearrangement of ‘Bugle Call Rag’.
2008		‘Grandmaster Flash’ Adventures 79: [They] were both killer-diller dance tunes.

2. (US black) morally unimpeachable.

1940

‘Digg Mee’ ‘Observation Post’ in N.Y. Age 12 Oct. 10/6: I’m not a killer-diller man....none of us are, you understand...but I think it’s a low down shame...to see a woman make love to a dame.