Let $P$ be a set of $n$ random points in $R^d$, generated from a probability measure on a $m$-dimensional manifold $M \subset R^d$. In this paper we study the homology of $U(P,r)$ -- the union of $d$-dimensional balls of radius $r$ around $P$, as $n \to \infty$, and $r \to 0$. In addition we study the critical points of $d_P$ -- the distance function from the set $P$. These two objects are known to be related via Morse theory. We present limit theorems for the Betti numbers of $U(P,r)$, as well as for number of critical points of index $k$ for $d_P$. Depending on how fast $r$ decays to zero as $n$ grows, these two objects exhibit different types of limiting behavior. In one particular case ($n r^m > C \log n$), we show that the Betti numbers of $U(P,r)$ perfectly recover the Betti numbers of the original manifold $M$, a result which is of significant interest in topological manifold learning.