I think the nostrils are too close together for 3d smell detection beyond very short odor wavelengths.

Perhaps if the dog is also aware of the direction of the wind during the time of the smell.

With whiskers, it might actually work in that way...

Yeah, I honestly suspect they might be able to do that. Human hunters often pay attention to wind direction when stalking prey so that they don't give away their position. This would be fairly similar to that.

yes, it's one of the reasons they articulate and constantly wet their nostrils.

http://chemse.oxfordjournals.org/content/30/4/291.full