Why wouldn't he admire Dally?? Dallas is everything that Johnny isn't. Dallas has a "cowboy" mentality. He is rugged, fearless, and bold.  This is evident in the statement he makes to Cherry Valance when she threatens to all the police on him. He says:

"Oh my, my,"--Dally looked bored--"you've got me scared to death. You ought to see my record sometime baby."

Dally has lived a hard life and as a result of his experiences in New York and with other groups, he has grown a thick skin. It takes very little to hurt or upset him. This is what Johnny looks u p to. In his mind he may be thinking what it would be like to be more like Johnny. Had he had Johnny's boldness, maybe he would be able to stand up to his mother. If he had been braver, perhaps he could take his father's beatings. Had he possessed Dally's fearlessness, maybe  he wouldn't have been so terrified of the Socs that he started carrying the blade that would change his life forever.

Johnny admires Dally's courage, first of all.  Dally is not afraid of anyone, but instead everyone is afraid of Dally. Dally has also survived sort of "against all odds." He grew up fighting for his life.  While most people who have had a life like Dally's would never desire to trust anyone or be trusted in by anyone, Dally does.  Dally displays his loyalty to Johnny and Ponyboy several times throughout the novel. The most obvious is when he jumps in to the burning church to save their lives.

Johnny is described throughout the entire story as a scared, beaten animal.  He is abused emotionally and physically by his parents and by the socs.  Dally is sort of a father-figure and protector to him.  It seems to me that Johnny is Dally's foil character, or his opposite.  Johnny's dismissal of his mother at the end displays the change in Johnny and his final effort to be more like Dally.