My experience 5 years into my head-fi adventure is quite the opposite.
I'll try to summarize my experiences very briefly, risking to make things sound a little dogmatic, so take this with a pinch of salt.
And let me get this out of the way - I am a big fan of the CHORD DACs for their combination of definition, speed, staging, detail and musicality. That means my observations are based on my experience with these products and may not apply to others.
DACs:
Cheap DACs and DAPs around 60-100 sounded a little better than a phone, spending gradually more money on DACs/DAPs the improvements were small.
First "break through" with a DAC was to buy a Chord Mojo at €400 in 2017 (This even sounded better than my old €4000 DAC in the 2-channel system...)
3 years later I had the chance to test and buy a used Hugo 2 for €1200 which took the sound quality to another level of transparency, texture, dynamics, stage depth and focus, detail and extension. I added a €600 Mojo 2 earlier this year to replace the older one for portable use, which nicely slots in between the original Mojo and the Hugo 2.
IEMs:
IEMs really scale quite differently. Some change less with better source quality, others really shine and transform.
Cheaper IEMs tend to scale less, but some more expensive ones don't scale as well as expected (Moondrop Variations for example). I can hear the differences of the DACs with a $20 Moondrop Chu, the Sony IER-M9 makes the Hugo 2 worthwhile for me, but the IER-Z1R scales much more than the M9 and really comes alive with the Hugo 2 compared to the Mojo 2.
Music:
At least with the CHORD DACs, good live recordings, classical and acoustic music benefit the most. The detail, texture, realism and sense of space the Hugo 2 provides makes the music feel really alive.
My conclusion:
I have asked myself many times what I would keep if I had to reduce my head-fi equipment to a certain budget. At €600 it would come down to Mojo + one of my €200 IEMs vs Moondrop Variations with my phone. I'd keep the Mojo+JVC FDX1. At €1000 it would be my IER-M9 with Mojo org, but I would really miss the SQ of Mojo 2, so I'd like to increase the budget to 1200, 600 each for Mojo and M9. If I could keep the €1250 (bought used) Z1R I would really, really want to keep the €1200 Hugo 2 (bought used). If I really had to limit my budget to lets say €1800 I would have a really hard time deciding between Hugo 2 + IER-M9 or Mojo 2 + Z1R. My heart would go for M2+Z1R (and I think it gives the better SQ) but my brain would actually say that the Hugo 2 + M9 is the better, more universal choice.
So no matter how I think about it, I'd always end up spending roughly the same amount on the DAC and the IEM.
This is only my experience and opinion, hope it does help somewhat
