7PCGamer: Yes I figured out ,. the spell description says that 'Monsters with 4 Hit Dice or more are unaffected.'... now Hit Dice = Level .. in AD&D lingo.. i was under the impression that some monsters who can roll four attack dices are not affected. Now i need to figure out what does AD&D means by Monster...
Stronger monsters tend to have better saves, so it may also be a case where the monsters are making their saves more often. In any event, Sleep's usefulness will drop off as you encounter stronger creatures, so you'll eventually want to swap it out for other spells.
"Monster" is a generic term to refer to your adversaries, not a technical term referring to specific kinds of enemies (though "Monstrous [X]" can be a term for a particular set of enemies). For example, the "Hold Person" spell can only paralyze humanoid creatures (generally anything similar to human in size, shape, and basic power, like elves, orcs, dwarves, and halflings), but "Hold Monster" has a chance of paralyzing anything that isn't straight up immune (undead can't be held, being immune to enchantments, but a giant could be held). Most enemies are not humanoids, but the term "Monster" can apply even to humanoids. If you got in a fight with an elf leading a pack of basilisks, then they can be collectively referred to as "the monsters".
Hit dice and class level roughly correspond, so a 5th level Thief and a monster with 5 hit dice will both be unaffected by Sleep. In the absence of class levels, hit dice are the number of dice a monster "rolls" for hit points (though hp is set in the cRPG), not its number of attacks. Generally speaking, a 5 HD monster is going to have more hp than a 2 HD monster, though the 2 HD monster might have more attacks in a given round.
7PCGamer: does it make sense to first read the AD&D book before playing this game?
Read through the game manual to get a feel for the mechanics. You don't need to read
all the spell descriptions (unless you want to), just focus on the mechanics for playing the game. It
would be a good idea to browse through the spells for each spell level you can cast, so you have an idea what each spell does.