I have done it both ways but from what I am seeing with yours, there is plenty of stem to just take off the baby, no different than grafting a plant by taking off a triangle cutting. I would take cinnamon and sprinkle it around/in the wound to prevent bacteria.
It will be hard to determine the type of dendrobium by name, it's obvious to me that it's a NOID meaning "No ID".
You can cut off one of the long stems or canes with sharp, clean pruners. With a sharp, sterile knife, cut sections of the cane so that each section contains a least two nodes (where the leaves use to be).
Lay horizontally, half buried on a bed of damp sand or sphagnum moss in a shallow container.
Cover the container with glass or plastic wrap to hold to the moisture.
Place the container in a warm 70-75 degree area where it will get diffused but not direct sunlight.
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