Which setup would sound better?
- High end headphone + mid DAC / amp
- mid-fi headphone + high end DAC / amp
Usually it's considered better to spend more for the headphones, then the DAC/amp.
Between those two options, I'd definitely prioritize the high-end headphone, as that's where most of your perceived sound quality comes from.
That said, I HAVE spent more on an amp than the headphone it's driving before...but since the headphone in question is a vintage Stax Lambda set, the only way you're gonna get any cheaper than a second-hand SRM-1/Mk2 Pro or SRM-T1 is to take the transformer box (SRD-6 or SRD-7) + speaker amp approach, if you don't mind the added bulk and complexity.
For dynamics and orthos, though, I prefer budgeting mostly for the headphone, possibly even leaving the amp out of the equation if it already sounds good enough directly from the source. (On the flip side, I've mostly sampled stuff like the AD700, HE-400, MA900, MMX 300...in other words, relatively sensitive sets I know I can drive from anything reasonably well without 'em sounding terrible for it. Things like the HD 800 or HE-6 are likely to be a different story, but I'd never spend that much on a single headphone...)