The cuisine in Montenegro is mainly based on meat dishes like steak, pljeskavica (spiced hamburger), cevapcici (sausages) or kebabs, but a lot of restaurants serve fish as well.
In Budva there are a lot of restaurants for all budgets. On the shore there are nice restaurants with live music, a steak stands around 14€. Most restaurants also have a grill outside on the road where you can buy your take away hamburger or sausages for 1,50€. In the old town of Budva you can find a lot of cosy restaurants serving international dishes, from pizza to Mexican food. Also try the pastry in the Marina and there are several good pastry shops in the old town of Budva.
One of the best restaurants in Montenegro with excellent food, service and a traditional ambience is restaurant Stari Mlini, between Kotor and Perast. The restaurant lies on a creek, has two old mills (Stari Mlini in Montenegrin) and is decorated with traditional kitchen utensils. The specialty of the restaurant is forrel which comes in honey or with herbs. The prices are a little bit higher than in other places but still very reasonable. The restaurant also has an excellent wine list.