Ross Warbeck, Joel Ewart, Nathan Smith, Craig Pool and Jack Adams were in the 4you pub in Sunny Beach on Wednesday night when five masked gangsters entered.
Wielding pistols, the gunmen peppered the inside of the premises with bullets, prompting the terrified lads to sprint away from the scene.
The Mafia shoot-out left one man dead and at least two others seriously injured, the Daily Record reports.
The teens, from Dumfriesshire, Scotland, escaped unharmed.
However, the Bulgarian press yesterday reported that an underworld boss was critically injured and one of his bodyguards was killed in the incident which happened just before 9pm local time.
Seventeen-year-old Ross of Chapelknowe, near Gretna, told the Standard: “Nathan noticed five men in ski masks running into the bar and then the shooting started.
“It was totally surreal and I still can’t believe it even happened, let alone so close to us as we were right by the shooters, they were just 10 feet away from us.
“We all ran out of the bar by jumping over the low wall surrounding the pub and when we looked back we could see that about 10 more unmasked men were outside shooting into the bar and a gunfight happened for about a minute before they all ran off in different directions.”
He added: “Apparently it was due to a gang dispute between drug lords and one guy died and two or more got injured.
“The locals were very helpful and concerned for the safety of others as Jack was taken from the bar by a big tattoo artist who shielded him from the gunfire with his body.”
The pals, who were all classmates at Langholm Academy, were on their first holiday together after leaving school.
Nathan, 18, is from Eaglesfield, Joel and Craig are both 17 and from Langholm and Jack is from Newcastleton.
Police flooded the street in the aftermath of the shoot-out and the teenagers were escorted back to their hotel by locals.
Bulgarian news reports stated that notorious drug lord Dimitar Zhelyazkov, known as Mityo The Eyes, was shot five times in the gunfight.
He remains critically ill in hospital in Burgas and one of his bodyguards is also in intensive care.
Another of his henchmen, aged 21, was shot and killed.
Chief Commissioner Georgi Kostov, Secretary General of the Minister of Interior, announced seven people had so far been detained over the incident.
According to Chief Commissioner Hristo Terziyski, head of DG National Police, the gunfight was sparked by a financial dispute between two crime gangs.
Media reports suggest Zhelyazkov, escorted by a gang of around 30 men, had paraded down the street and entered the restaurant bar owned by Bozhidar Georgiev in a bid to extort money.
The country’s Prime Minister Boyko Borissov said that interior minister Rumyana Bachvarova had cancelled her participation in the Council of Ministers in Brussels and was travelling to Burgas as a result of the incident.
By Iain Pollock