The former Blancos forward is expecting two incredibly tough games against Jurgen Klopp's men, who took four points off the Spaniards in the group stages
The two sides were drawn together in the group stages and it was Jurgen Klopp's men who took top spot, thanks to a 2-1 victory over los Blancos at Signal Iduna Park and a draw at the Santiago Bernabeu a fortnight later.
Consequently, Madrid director Butragueno is well aware of just how big a job the Liga giants have on their hands.
"It is an honour for us to play the semi-finals of this great competition," the former Spain international is quoted as saying by the club's official website.
"Regarding Borussia Dortmund, I have to say that we have met twice this season against them and we have not been able to beat them.
"So, eliminating them will not be easy, but we are looking forward to the final at Wembley that we are all dreaming of."
Madrid will travel to Dortmund for the first leg before welcoming the Bundesliga outfit back to the Spanish capital a week later.