Where does "MidFi" differ from "HiFi" or "LOFI"?

I have two systems, both equally musically involving.  My best friend does as well. My first system is lower high end, in a very expensive custom built listening room.  My second system cost $5,000, almost all used equipment and is borderline lower high end and upper mid-fi.  My friend's system cost about $15,000 and is upper mid-fi or lower high end.   These are systems with no defects, just differences of presentation capabilities.  Full range, highly dynamic, colorful with great body like real vocalists and instrumentalists.  

My first system has two issues which prevent it from being more enjoyable.  The speakers don't permit more than 1.5 seating for the sweet spot/optimal imaging.  My intended future speakers (Von Schweikert probable) through an enormously wide seating capability.  The second issue is 3D depth.  The third issue is imaging (my speakers image well enough but the size and locations are just not accurate to the recording as VS speakers).   

As to DACs, I've tried inexpensive and expensive ($9,000) DACs.  My friend redesigned a Benchmark HDR1 as you can see in my equipment profile.  He replaced the analog board.  That made a significant difference as the analog board does as noted by several prior posters.  The $5K DAC was sweet as could be with frequency extreme and resolution limitations.  The $10K DAC had it all but lacked body.  Everything sounded lean, which some audiophiles prefer, despite having ample deep bass.  I tried over 15 transports, no luck.  Also, those two expensive DACs had depth limitations which my current DAC does not.  

Price for equipment is not determinative of quality.  After hearing over 500+ systems, I've heard too many bad expensive systems and quite enjoyable mid-fi systems.  However, it is my belief that quality used audio gear can provide an audiophile with highly discounted excellent, enjoyable sound.  Low-fi systems (under $1K) just have too many limitations.  

The problem in addition to the room is the synergy of equipment.  This is a difficult and trial and error problem which can be costly (as were my failed DACs and transports).  I've found that if I hear enjoyable systems which use the same equipment such as a cartridge or a speaker, it is probable that if it fit into my system, it would sound just as enjoyable.  

@fleschler 

Low-fi systems (under $1K) just have too many limitations.  (for you!)

I encourage you to check out the many active speaker/systems available below $1000.

For example:

https://www.soundstagesimplifi.com/index.php/equipment-reviews/217-svs-prime-wireless-pro-active-loudspeaker-system

@kota1 Right, for me, for all my audiophile friends that system is inadequate. We listen to LPs and CDs, so no way can an analog system of low-fi cost achieve great sound with the SVS system included in the $1K. Used CD players like a Kyocera 310 or 410 can be purchased and upgraded caps and belts for a reasonable price. That’s pushing it to get it to a $1K system. Streaming will just not get me going with the SVS system generally (many observers find that only 15% of streamed music sounds as equally as good as well mastered CD or LPs). Sure, I have Audioengine computer speakers and they sound very good but are not fulfilling especially on rock and symphonic music. Plus, they need a computer.

@fleschler , take $1000 budget (low-fi) and try and replicate an active system like that, going old school, one component at a time. Inadequate at MSRP, yes.

You take an active system like SVS, Paradigm PW, etc. and you catapult right into "adequate" (office, bedroom, second system) mid-fi performance. 

You are an expert with high audio IQ and a custom built room, that is inadequate for you, yes. But to buy one component, meticulously engineered, plug and play, lowfi price, solid mid-fi performance = adequate for most people IMO.

Adequate for most people include some of my professional vocalists friends (older) who are old school and own a Marantz or Yamaha receiver from the 1970s, Advent/Warefdale/JBL speakers, ordinary (cheap) cabling, a Harmon Kardon or Technics turntable and 1980s or 1990s common name brand CD player.  Sounds good, not audiophile, but satisfying to them.  That group can be purchased just over $1K.