So then it does have merit!
Let us say the Masamune is just a bonus to Dalton. Even if he did acquire it during the Guardia siege from the last wielder, it somehow found its way back to the Denadaro Mountains or the Divine Dragon Falls. In regards to the Hero Medal (Badge), it would seem Pierre acquired it first. He lost it, but was returned to his possession by Serge. Perhaps Pierre obtained it elsewhere, brought it to Termina where he dropped it on his way to Zappa's, and some little kid picked it up. Where he got it in the first place is zesty, because the last wielder of the Masamune must have had it on him (perhaps, perhaps not).
I think it might be time to dig up my old Chrono Break idea for some healthy critiquing and bashing. I believe Dalton had something even bigger than the Masamune - say, the DNA or building blocks of a Lavos spawn for instance. By convincing Porre of his ultimate goal and of his new trump card, he would get Porre to help him synthesize the find; while in return, he would help Porre in razing Guardia to gain their respect. Fast-fowarding... Porre becomes #1, Guardia is demoralized and besieged, and Crono and Marle vanish - possibly to consult the Guru's about the recent turn of events and the presence of a man in 1000 A.D. from the ancient kingdom of Zeal who now holds, literally, "the ultimate equalizer". He may have entered into 1000 A.D. from that Time Gate in Guardia Forest. Any other explanation on how that Gate formed is The Entity leading Crono on a bigger goal to discover the planets fate and future.