Dempo scored through Joaquim Abranches (73rd) and Koko Sakibo (85th) after a goalless first-half as their Goan rivals were reduced to 10 players in the final few minutes in the second semifinal at the floodlit Kanchenjungha Stadium here.
From a right flank counter-attack, Abranches found the back of the net with a powerful right-footer to give Dempo the lead.
It was then a fine display by a cool-headed Sakibo that took the game away from the Karim Bencherifa-coached defending champions.
Sakibo was tackled inside the box by Luciano Sabrosa but with an inside dribble and turning around the former unsettled the Salgaocar defender who fell down in the bargain.
Sakibo then was quick to slot it home to put the ball past Salgaocar goalkeeper Karanjit Singh's rich for a 2-0 lead.
A minute later Fulgencio Cardozo was redcarded by referee Ajit Meetei of Manipur after a bad tackle to Anthony Pererira as the numerical advantage too favoured the I-League champions.
There was no looking back for Dempo who steered it clear of Salgaocar in the final minutes for their fifth passage into the Federation Cup final.
Playing with just one foreigner in Nigerian recruit Sakibo as the other -- Ryuji Suyeoka injured -- Dempo dished out an attacking game in the first-half but the incisive strike went missing.
After the changeover, Dempo captain Clifford Miranda's left-sided corner hit the cross bar and went out in the 53rd minute.
The most successful team of the I-League Dempo do not enjoy a similar record in the Federation Cup, winning it only once in Bangalore 2004 that is remembered for the tragic death of their Brazilian forward Cristiano Junior.
Dempo will take on the last year's runners-up East Bengal in the summit showdown on Sunday.
