In my experience (only as a long time dog owner; and several dog personalities) dogs don't like to be awakened suddenly - it's a survival instinct. I don't think anyone/dog was at fault in your situation but I would definitely heed the advice given in earlier posts, including training your baby how to behave around the dogs as well (babies learn early about the world around them).
I've found that even young children can elicite unexpected responses from my EL D – the neighbor girl (preschool) across the street likes him but has a (bad) habit of shreeking whenever he comes to her -- not only does it get on my nerves, her shreeking iritates EL D (his hair starts to rise) and I have to always talk/pet to him to calm him. Another neighbor has a grandson (with a constant grin on his face) who loves to call EL D to him and then tries to poke him in the eye or nose. Luckily so far EL D has always taken that as accidental (which it clearly is not) and has generally turned away. People have a tendency to train/change dog behavior but ignore/forget training the behavior of children.