Transplanting (HTW Tip)
Transplanting occurs when seedlings become too big for the container you have started them in. If you have started multiple seeds in one container, it is best to transplant them to their own individual containers when they have two sets of leaves. The first set of leaves you see from your seedling will actually be their cotyledons or their embryonic leaves. True leaves will begin forming as the second set of leaves. With tomatoes in particular, its true leaves will be serrated while its cotyledons are simple (not serrated).
Transplant your individual plants to individual containers that are bigger. Make sure to create drainage holes once again and feed your newly transplanted seedlings with fertilizer. Also remember to label your plants as you go so you do not become confused as to what plant went where. We all think we know what plants are what until you become distracted and realize you have a bunch of seedlings and no idea which is which.