1 Alvissa: Now that the wolves are dealt with, we should get some sleep. I'll take first watch.
2 Lambert: Why do you always get first watch?
3 Alvissa: Because I'm capable of staying awake rather than falling asleep and leaving us unguarded all night.
4 Lambert: Zzzz...
4 Alvissa: That's why I get second and third watches too...

For some reason, the writers of Dungeons & Dragons 3rd Edition decided to give elves an ability called "trance" (which they retain in the current 5th edition). It means they don't require sleep, but merely need to meditate in a semi-conscious state for 4 hours a day. This gives them the rest benefits of a full 8 hours of sleep - except that if they are spellcasters they still need 8 hours of quiet rest (reading or light tasks) before recovering spells. So what this means is that any elf in an adventuring party can basically keep watch all night, being at least semi-conscious the whole time, while everyone else just sleeps.

I'm not sure why they made this change.^[1] In previous editions elves had to sleep just like everyone else, and so we always had to plan out watches and make sure someone was awake to keep guard throughout the night.

Being a good old first edition elf, Alvissa ideally would like to get a good night's sleep occasionally.

[1] Readers have since pointed out that it makes elves more Tolkien-esque, alluding to the passage "In one of the first chapters of The Two Towers, when the three hunters are tracking the orcs that kidnapped Merry and Pippin, there is a short paragraph where Legolas reflects on the fact that he does not sleep, but just needs to have what we would define 'waking dreams' to rejuvenate himself."