Jemeorex Sabaga struck in the 65th and 80th minutes to propel Iligan to its 19th finals appearance.
The locals dominated the match from the start, making no less than 20 attempts that either missed the target or was saved by the goalkeeper.
The Davao boys outgunned the Zambo booters, five goals to four, in the shootout to rule the first semifinal match after they had tied 1-1 in the regulation and extension periods.
Ateneo and La Salle will dispute the title today after the match for third place between Andres Bonifacio College and MLang National High.
The two finalists will represent Mindanao in the national finals set Feb. 9-13 in Dumaguete City.
Also competing in the national finals are Cebus Don Bosco Technology and Negros Orientals champion and the top two teams from Luzon.