The traditional "5-pocket" jeans are a staple of every guy's wardrobe, and have been for decades.
With such longevity, it makes sense that some of the garment's original intent would be lost to history.

Some of that intent has been reclaimed on a (quite long) Quora thread asking essentially the same question: What is that tiny pocket-in-a-pocket for?

Well, it turns out, it was originally a watch pocket, meant to be just big enough to slip in a pocket watch, according to the Levi's blog .
A watch in this pocket would be protected from the elements and from scratching, while still being easily accessible to check the time.
Since then, watches have moved to the wrist or disappeared completely. Jeans still have the fifth pocket, though, so we may as well make use for it.
Here are some common modern uses for the vestigial small pocket:

Coin pocket.
Ticket pocket.
Condom pocket.
Lip balm pocket.
USB dongle pocket.
Gum pocket.
Lighter pocket.