Gracie sleeps in a dog bed on my bed. Dogs can be great foot warmers in wintertime! And yes, she sleeps with her stuffed animal toys. I've tried to cover Gracie on cold winter nights with her own cozy fleece blanket but after a while she seems to get too warm and just shakes it off. The "blanket" she favors is an old, lightweight cotton tablecloth. I guess her fur coat keeps her warm enough!