i wouldnt worry about their eyes drying out. they naturally blink even in their sleep if their eyes get too dry. All my dogs have done it at one time or another. usually when they shift positions, their eyes flicker too. Its just something that happens. no big deal. but i agree that it is weird and a little creepy
I don't know anything about if there is health risks with this but my soon to be 4 month old puppy does this too. I have never had a dog or puppy do this but her. It freaks us out too. Don't know what to do about it though. I sometimes wake her up and she goes back to sleep with her eyes closed but she does this on a regular basis. It is so freaky!!
The eyes aren't actually "rolled" back...many dogs sleep with their eyes as we think "partially" open but the little bluish whitish film that you're seeing is what's called the nictitating membrane, or third eyelid. It rolls over the eyes when they sleep.
Actually if you've ever seen a dog on acepromazine, which is a sedative, they will often be awake and have their eyes halfway covered by that membrane.