Go exploring along certain rock faces in South America, and you might
come across strange, smooth-walled tunnels cutting through the earth.
There are hundreds of them in certain regions of Brazil and Argentina,
some so large you could stand up in them. At first, you might suspect
these were simple caves, but caves are formed by water dissolving
rock. These tunnels are different: up and down the walls, you can see
marks that were clearly made by something with enormous claws.
If you are inclined to dig, all you need to do to make a tool is to pick it up and dig with it. These monkeys can dig with their hands, but they can also use tools to dig.
Digging up food: excavation stone tool use by wild capuchin monkeys
A tool is an object which is not part of the body and which is used by a creature to achieve a desired end. A Megatherium which could grip a rock (and sloths can grip, so probably Megatheria too) could mimic the digging actions it did with its claws while using the rock.
Maybe by tool you do not mean unmodified rock or stick but catalytic converter or pneumatic drill. If you have particular tools in mind for your sloths, add that to your question.