Charlie Sheen Knife, Drug Allegations are LIES By Unethical Dental Tech

Charlie Sheen admits he went crazy in a dentist's chair last week ... but insists he was NOT on drugs -- he had a horrible reaction to nitrous oxide ... and the technician who is making the allegation is just bitter because she was fired for violating the law.

Charlie's rep, Jeff Ballard, tells TMZ ... Charlie was on meds for a shoulder injury and the combo of the Rx he was on along with the nitrous caused the reaction. We're told Charlie's arms did flail and he accidentally knocked over the dental instruments on the tray, but that was it.

Furthermore ... Charlie's lawyer, Marty Singer, tells TMZ, "The story is being made up by this woman [the dental technician] who was fired on Friday for violating HIPAA by telling her son Charlie was in the office. It got back to Charlie and the dentist fired her."

As we reported ... the technician told cops the dentist told her Charlie came at him with a knife and his bodyguard said he was on rock cocaine.  

But law enforcement sources tell TMZ ... the dentist was interviewed Thursday and was clear with cops ... the technician was LYING.  There was no mention of drugs and NO KNIFE.

A law enforcement source familiar with the situation tells TMZ ... given that the dentist refutes the technician's story ... the case will almost certainly be rejected by prosecutors.