So I have one male and one female dwellers that have high special. If I let them make a baby dweller do I get a good chance of getting a good baby dweller?
Yes, it is possible for normal dwellers to give birth to a legendary dweller, altough it is very difficult. If you breed 2 maximum level (level 50) dwellers who also have a maxed out SPECIAL (all stats are equal to or greater than 10).
Even at the maximum requirements, you still only have a 7% chance to obtain a legendary and a 13% chance to obtain a rare. All rares and legendaries born have a naturally very high intelligence.