Nadal overpowered Djokovic and converted on his third match point to earn his first victory against the second-ranked Serb since the 2014 French Open final.
At last Djokovic got on the board, though he was pulled back from 40-0 to deuce, and made a small inroad into the Nadal serve to 30, but again the Spaniard reasserted his dominance, pounding from behind the baseline to both wings, and closing with a near ace, 5-1. The semifinal in question is scheduled for Saturday and would've been played out by the time you read this.
It proved to be just a brief respite for the Serbian, however, as Nadal broke him again in the next game and held to restore his two-game lead. Nadal goes for his 4th Madrid title while Thiem, who saved five MPs against Dimitrov earlier in the week, eyes the biggest win of his career in his first Masters final.
Djokovic showed flashes of his best but, in just his second semi-final of the year, he was unable to break through a fierce Nadal serve and the Spaniard, who leads the year's Race to London standings, will now look to add to the titles he has claimed in Monte Carlo and Barcelona over the last few weeks.
In a season dominated by old-stagers, Nadal has won 14 out of 14 matches since the start of the clay-court season, and will play for a third successive title on Sunday.
It will be the Spaniard's eighth final at his home tournament, and the first since losing to Andy Murray in 2015.
With Friday's rain relenting, the roof open and the sun beating down on the Caja Magica, there were plenty of stars in attendance and Real Madrid fan Nadal will have been pleased to see Cristiano Ronaldo, Luis Figo and Raul watching on.
This time previous year Djokovic was on top of the tennis world, not only in the present, but ticking all-time great achievements. "Winning is very important but also the way I'm playing at the moment makes me very relaxed". After a decent start to the season, where he played three hard court finals - including Australian Open and the Miami Masters - Nadal looks comfortable on his preferred turf and is easily the man to beat till the clay season culminates. Goffin, on the other hand, won 27 matches this year so far. I played a little bit shorter.
An open era record 50th meeting between Nadal and Djokovic served to highlight the Serb's dramatic dip in form since they last met in Rome nearly exactly a year ago.
In studying Nadal's movement in completing a first win over Djokovic since 2014, it is wiser that Federer opted for hibernation rather than over-extend his ambition.
"Rafa was obviously a better player today", Djokovic said.
"His quality was very high". He managed to do whatever he wanted really, especially in the first set.
Nadal had been forced to withdraw in Paris with a wrist injury that decimated the rest of his season and saw him drop to No9 in the rankings at the end of the year. As far as Djokovic and his continuing decline goes, this loss can't necessarily be attributed to his recent decision to fire his entire support team.