While they wait, Estrada tells Dexter that his mother was a snitch and "it was her or me." Dexter stabs Estrada in the chest, killing the last of his mother's murderers. He plans on shooting LaGuerta when she arrives and Estrada (postmortem) to make it look like they killed each other.

Why did Dexter kill Estrada?

When Estrada tells him it was a matter of survival, Dexter stabs him in the chest, killing him. Dexter then shoots Estrada's corpse in order to make it look like LaGuerta shot him, with LaGuerta later being shot and killed before having the scene set up to make it look like Estrada shot her in return before his death.

What episode does Dexter kill Estrada?

This same container yard/kill room shows up again during the climax of the season finale, Episode 12, when Dexter kills Estrada there, and is then about to kill LaGuerta, when Debra unexpectedly arrives on the scene, and winds up shooting LaGuerta herself.