Next up is another showdown with Michigan.
The third-seeded Spartans (25-8) won consecutive games for the first time since an 11-game run ended in January. They will meet the top-seeded Wolverines in the final on Sunday.
"We're just scratching the surface," Payne said. "We didn't play at a high level before just because we haven't had time for everyone to play together for a long period of time. This tournament has been great because we've been able to play with each other more and we're starting to look better."
Dawson scored in double figures for the second straight game after getting off to a slow start in his return from a broken right hand. He went 6 for 8 from the field as the Spartans shot 56 percent against the defense-minded Badgers.
The Spartans went on a 16-1 run in the first half and took a 37-16 lead when Gary Harris scored with 5:39 left before halftime.
"I thought we played some of our best basketball of the year in that first five minutes," coach Tom Izzo said. "Wisconsin is very good. I thought we played awfully well."
Michigan State was swept by Michigan during the regular season, but it has a perfect record in conference title games. The Spartans' last championship came in a win over Ohio State in 2012.
The first half against Wisconsin was one of the best periods Michigan State has played all season.
Traevon Jackson's layup helped Wisconsin close to 21-15 with 10:43 left in the first half, but the Spartans responded with a 16-1 run that included three three-point plays.
Payne scored and Denzel Valentine hit a 3-pointer to give the Spartans a 26-15 lead. Then Dawson was fouled on a layup and made the ensuing foul shot.
Bronson Koening made a free throw for the Badgers before Payne and Travis Trice had consecutive three-point plays. Trice then forced a turnover and Harris scored on a fast-break layup to increase the lead to 21 with 5:39 left in the first half.
It was pretty much a total breakdown for the Badgers in the first half, a surprising start for a team that was being mentioned as a possibility for a No. 1 seed in the upcoming NCAA tournament.
"Ball movement, body movement, shot selection, it's never just one thing," Wisconsin coach Bo Ryan said. "It's a combination of things. We weren't very fluid, but we found that fluidity."
Wisconsin trailed 43-26 at the break, but it rallied in the second half. Dekker's dunk capped an 8-2 spurt that trimmed Michigan State's lead to 51-41 with 15:02 remaining.
The Badgers got within seven when Jackson made a pair of free throws with under four minutes to play and again when Jackson hit a 3 with 51 seconds remaining. But the rally fizzled from there.
"We dug ourselves a hole in the first half and we were trying to climb out of that hole that entire second half," Kaminsky said. "We didn't have enough left in the tank to get over that."
Jackson finished with 10 points for Wisconsin, which shot 28 percent in the first half. The Badgers have dropped two of their last three games and lost for the first time this season on a neutral court.