The eastern Europeans were tipped as medal contenders before the tournament started and they lived up to their billing, with a decisive six-minute period in the second half where they scored five goals in a row to set up a final with reigning gold medallists Norway on Saturday.
Bulatovic, who scored a last-throw winner against France in the quarter-finals, was at it again as she dominated the scoreboard, though the win was underpinned by the performance of the imperious Bojana Popovic, who threw in six and was at the heart of everything Montenegro did.
Spain will see this as an opportunity missed after performing well throughout the tournament, and they will now contest the bronze medal with the Republic of Korea in a prelude to Saturday's main event.
Jorge Duenas' side arrived here tonight after seeing off Croatia in the quarter-final, while Montenegro caused a real upset when they knocked France out in a last-gasp victory to book their last-four spot.
And neither side were able to gain the upper hand in the first half, with the scores locked at 6-6 after 14 minutes and then 13-13 by the half-time interval.
Nely Alberto Francisca was the star for Spain with five goals while Popovic outlined why she is rated as one of the best players in the world with four first-half efforts.