Neurologically: nicotine increases your memory and I’d guess that applies to dream recall. On the other hand, it might be that nicotine, like caffeine, disturbs your sleep cycle in such a way that its beneficial effects to memory are negatively compensated by the damage it does to your sleep and dreams. It all depends on how much you smoke and at what times, and since I’m no doctor and this is all guesswork, I’ll stop here. If you feel it’s influencing negatively, try stopping 
P) or smoking the last cigarette way earlier than the time you go to bed (stop smoking about two hours before sleep) so that you can see how it works for you when you’re not under influence.
Also, many of the other components of cigarettes and nicotine itself are chemically addictive, so as Moogle pointed out you will probably wake up thinking about the first cigarette (although that’s not necessarily so).
Physiologically: if said you smoke, so you probably know how awful waking up can be to a smoker—as soon as you stand, you start coughing that gross dark mucus and it gets hard to concentrate in remembering anything.
Warning: gross fact of the day under the spoiler. Read it on your own risk.
[spoiler]This is due to the fact that there’s an involuntary movement in the trachea that pushes the mucus up the trachea and down your esophagus so that it won’t pile up inside your lungs. As it happens, nicotine stops that pushing movement, so the mucus slides down to the lung. When you sleep, that mucus solidifies because you’re in a still position, so when you wake up, that lot of dark solid mucus breaks into particles that go to your bronchi and make you choke. The mucus is dark because of the tar it was supposed to protect your lungs from.
By the way, I haven’t heard of anyone who died because of mucus on the lungs because of smoking (people die of mucus on the lungs, sure, but because of a genetic disease; what I’m saying is—as far as I’m aware of, smoking won’t get you in such a serious situation), so you will probably not be the first to die of that, the worst that can (and will) happen is that your lung capacity will be reduced, but when you start smoking you are aware of that, so no news here. Just don’t worry about choking to death or anything, that’s hardly the case here. 
[/spoiler]
Thus, whenever you smoke before going to sleep, you will have the smoker’s cough when you wake up, and it’s seriously hard to focus on dream or anything else when you’re choking and coughing like that.
You said your recall has been sleeping and you’re worried it could be tobacco. All I did here was pull plausible explanations. It is possible, though, that the bad recall is not due to tobacco—if it was, I gave you the possible causes, but I’m no doctor or researcher so I can’t tell you for sure if that’s why your recall has been slipping.
I told you to try smoking the last cigarette earlier. What I said nicotine does, in the spoiler, only wears off about five hours after you smoked the last one (it actually won’t wear off completely for over a day, but the movement comes back after five hours and slowly gets to it’s normal pace again), so you won’t get rid of the physiological thing unless you completely stop smoking at least five and a half hours before you go to bed and in that case you might as well stop completely.
The neurological causes, on the other hand, you might get rid of by smoking the last cigarette about two hours before sleep, which is something more realistic to a smoker’s point of view and something I strongly recommend you to experiment with.
