Augustiner for food - any location. Good old fashioned brewery restaurant and superb beer.

There are very few cheap airfares to Dubrovnik from Western Europe - simple supply and demand issue

www.hotel-uhland.de - moderately priced hotel across from Oktoberfest grounds. Have stayed there several times. They book up quickly for Oktoberfest.
We always enjoy eating at the Ratskeller at Marianplatz (right in the center of historical Munich) -- not cheap, but reasonable IMO.

Oktoberfest and being on a budget and looking for a nice, more upscale hotel don't rhyme.
If you are thinking about Oktoberfest this year, rooms started to sell out my March.
Booking.com and similar will be your friend. Hotel prices usually double to triple during Oktoberfest.

The only nonstop to Dubrovnik from Munich is with Lufthansa.
Which will probably not be cheap.
An alternative is to check kayak.com or similar for cheaper flights which require one change.

Or drop Munich and fly Paris-Dubrovnik.

>>>2 nights Paris, 1 night Munich, and the rest in Dubrovnik<<<

This sounds absolutely crazy. 2 nights in Paris means one day in Paris. One Night in München means you might have half a day there (you have to get from and to the airport). And if you want to go to the Oktoberfest you will not have any time to see something. And you will not have time to eat except on the Oktoberfest where you have the choice of sausages and knuckle of pork.

If your time is so limited better skip Paris and München - both cities deserve more time.

And, as said, München is extremely crowded and extremely expensive during Oktoberfest time.

When I was in Munich (2 times) I went to Bratwurstherzl, liked the restaurant very much. But on weekend there were a lot of people however, so I booked table via http://www.comfortway.com/?region=118.04

They won't have time for a restaurant. If their flight arrives at 10 a.m., they need one hour to grab the baggage and to reach the S-Bahn. Another hour for the ride into downtown and at least half an hour for a ride to a suburb where they might find a cheap hotel. It is 12:30 then. They drop the baggage, and it is time to ride to the Oktoberfest. They will arrive at the Wiesn around 14:30 and will have a meal there (it is the only reason to go the Oktoberfest). They will stay until the evening, eating another wurst and riding back to the hotel. The next morning breakfast, checking out and again riding to the airport in order to catch the flight to Dubrovnik.

BTW, for hotel search, use www.hrs.com

I don't know for sure, but it may not even be possible to book a hotel for only one night during Oktoberfest.

I agree - save Munich for another visit. And you need more than 2 days for Paris.