When you quaff it, a potion of sleeping will make you fall asleep, blessed for 13-23 turns, uncursed for 25-35 turns and cursed for 37-47 turns, unless you have sleep resistance or free action, in which case "you yawn".[1]
Monsters will throw these at you. If the potion hits you, then the vapors will make you fall asleep ("You feel rather tired.") for 1 to 5 turns, and abuse your dexterity.[2]
If the potion hits a monster, then the monster temporarily sleeps ("(The monster) falls asleep.") for 1 to 12 turns, unless the vapors miss the monster or the monster has sleep resistance.[3]
Dipping a unicorn horn in this potion does not convert it to uncursed water.