This happened to my daughter last year, just once, on a cold dry night. I found her in the morning with blood on her sheets and dried blood all around her mouth (she was on her back so it went down her throat and out her mouth, yuck!). It really freaked me out too! But she was fine. The pediatrician said it was a nose bleed and there was no harm done--my daughter didn't have any ill effects at all, and it's never happened again. I did place a humidifier in her room at night for a few nights afterwards. So, basically, it's frightening, but really not a cause for concern!