Youth Hostels in Montenegro

We stayed as a family with 3 children. Location was great and staff very friendly. Eating was a bit difficult as there wasn't a big enough table for all of us to eat comfortably, but we managed. The staff did our washing for us and were very helpful. Certainly for backpackers a great hostel.

Hotel Dolcino in Ulcinj is a good mid-range option. It's away from the beach area, but on the main road that leads to/from the beach and Old Town.
Rooms are relatively big and clean and the breakfast is nice as well. Didn't have a balcony though, which is annoying when it's great weather to enjoy a cold beer outside.
It's family run, but not overly friendly. Not unfriendly as well, but I guess wherever there are more tourists (beaches nearby!), the friendliness of people working in the travel business declines.
All in all good value (price/quality ratio) and well above the low budget range.