"Morning breath" is the term people use for the
bad breath people experience after waking up from sleep, usually in the morning, hence the name.
Morning breath is caused by anaerobic bacteria, the xerostomia (dry mouth) or the volatile sulfur compounds (which are waste products from the bacteria). Other contributing factors to foul oral odor includes medication, alcohol, sugar, smoking, caffeine, and eating dairy products prior to sleep.
Brushing your teeth before and after bed, as well as flossing, may help.
Source:
http://www.cnn.com/2005/SHOWBIZ/books/08/03/leisure.nipples.reut/index.html