In The Name of Allah, The Most Merciful, The Bestower of Mercy.

Allah, The Most High, said:

وَتَحۡسَبُہُمۡ أَيۡقَاظً۬ا وَهُمۡ رُقُودٌ۬‌ۚ وَنُقَلِّبُهُمۡ ذَاتَ ٱلۡيَمِينِ وَذَاتَ ٱلشِّمَالِ‌ۖ وَكَلۡبُهُم بَـٰسِطٌ۬ ذِرَاعَيۡهِ بِٱلۡوَصِيدِ‌ۚ لَوِ ٱطَّلَعۡتَ عَلَيۡہِمۡ لَوَلَّيۡتَ مِنۡهُمۡ فِرَارً۬ا وَلَمُلِئۡتَ مِنۡہُمۡ رُعۡبً۬ا

And you would have thought them awake, while they were asleep. And We turned them on their right and on their left sides, and their dog stretching forth his two forelegs at the entrance [of the Cave or in the space near to the entrance of the Cave (as a guard at the gate)]. Had you looked at them, you would certainly have turned back from them in flight, and would certainly have been filled with awe of them. [Ayah 18]

وَتَحۡسَبُہُمۡ أَيۡقَاظً۬ا وَهُمۡ رُقُودٌ۬‌ۚ
And you would have thought them awake, while they were asleep.

Meaning, O you the one who looks at them! You would have thought they were awake, while indeed they were in a state of sleep. The Mufassirun stated that it was because their eyes were open, so that they would not be ruined, thus, the one who saw them would have thought that they were awake, even though they were sleeping.

وَنُقَلِّبُهُمۡ ذَاتَ ٱلۡيَمِينِ وَذَاتَ ٱلشِّمَالِ‌ۖ

And We turned them on their right and on their left sides.

Also, this was to preserve their bodies, because the earth – due the nature (Allah has given it) – would eat up bodies that have very close contact with it (i.e. for a prolong period without movement). So, by Allah’s decree, He made them to turn over on their right and on their left sides for what was needed to stop the earth from ruining their bodies. Allah, The Most High, has (perfect ability) to protect them from (being ruined by) the earth without turning them over, but He, The Most High, is all-Wise, and He wanted the things He has created and decreed in the creation to take effect, and attached the causes to their effects.

وَكَلۡبُهُم بَـٰسِطٌ۬ ذِرَاعَيۡهِ بِٱلۡوَصِيدِ‌ۚ

And their dog stretching forth his two forelegs at the entrance (of the Cave or in the space near to the entrance of the Cave (as a guard at the gate).

Meaning, the dog that was with the companions of the cave fell asleep as they fell asleep while it was guarding them, and it stretched forth its two forelegs at the entrance of the cave. This was to protect them from being eaten by the earth.

As for protecting them from the people, Allah informed us that He protected them through the fear (or frightening scene) which He placed around them, thus, if anyone saw them, his heart would have been overwhelmed with fear and he would have certainly turned back from them in flight. And this assured that they would stay throughout this prolonged period, while none was aware of them despite the fact that they were very close to the city. The proof of their closeness to the city is that after waking up, they sent one of them to buy some food from the city, while they remained there to wait for him. This shows that they were very close to the city.

[An Excerpt from Tafseer As-Sadi. Abridged and Slightly paraphrased]