When I'm laying down with my arms to my side why do my arms fall asleep?

Arm Asleep? Most of the time this is caused by simple pressure on the nerve that innervates the arm. Pressure on the nerve will reduce or stop the blood flow to the nerve, and the numbness, tingling and pain ensues. It will likely wake you us, you will roll off the arm, blood will be supplied to the nerve, and within a few minutes, the nerve will be functioning normally.
Let help you. The most common reason for arms to fall asleep at night, to have condition called carpel tunnel syndrome. The way we sleep in the fetal position (hand bent down), that increase the pressure in the carpel tunnel which host the nerve, that cause the arm go to asleep.