I don't think that it can be argued that dogs have an inherent sense of direction. This goes some way to explaining the multiple instances whereby such animals have found their way home from incredible distances that their other senses, or a prestigious memory, would not be able to explain.
I support the fact that all living beings have a sense of direction to a certain degree and some much more so than others. I can be hopelessly lost and at times find my way much more successfully by simply "feeling" the right way to go rather than trying to figure it out logically.
Yes, dogs can tell directions. Although they are not as smart as humans, they still have a sense of where they are going and where they came from. They may use their keen sense of smell to aid them in figuring out the way home in addition to their sight and memory.
Yes, it is my belief that dogs have a sense of direction predominantly guided by scent. In my opinion, they can't necessarily tell North/East/West/South direction, but they can guide themselves using their noses by picking up scents they recognize.
That being said, the ability for a dog to guide itself home is dependent on the sensitivity of their noses which varies from dog to dog.