The world No. 9 beat the big-serving Canadian in straight sets, with Raonic often wasteful on the biggest points.
Nadal produced some wonderful shot-making and secured his passage to the last four with a 6-4 7-6 (9-7) 6-4.
Earlier Dimitrov, one of three players with a one-handed backhand left in the draw, had beaten David Goffin with ease, beating the Belgian 6-3 6-2 6-4.
And his reward is now a clash with Nadal, who is aiming to become the first man in the Open Era to win each Slam twice or more.
Nadal took first blood in the opener, playing a tremendous return game to break for a 4-3 lead and went on to take it 6-4.
A cagey second set followed, with Nadal saving three set points while serving to stay in it at 4-5.
Six set points in total came and went for the Canadian who painfully lost the tiebreak 9-7, double faulting on one of his chances.
Nadal then bided his time in the final set, breaking Raonic to love to finish and move into the next round.
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