The setting is an extension of iOS' system-wide dark mode, and Instagram has basically revamped its UI to match the theme.
One thing that you should note is, that the dark mode theme on Instagram works in correspondence with the system theme you are using on your iPhone.
The Instagram update is now rolling out to users. All in all, it's great that another popular iOS app is getting important visual improvements like the dark mode. Wish there was just a simple toggle like on other apps. Not like dark mode on Google Apps where it is sort of grey, or washed out. If you have dark mode enabled on your device, when you get the new Instagram update you should see that the app automatically switches to a black background with white text.More news: Hong Kong bourse scraps $39-billion play for London Stock Exchange
More news: BREAKING NEWS Parents Appeal to US Diplomat
More news: Jennifer Arcuri: I never, ever received favouritism from Boris Johnson
A third way to do it is by going to Settings Display & Brightness, and then tapping on the "Dark" theme option. You can check if it has by simply enabling Night mode from the notification shade and then opening the Play Store app. This is flawless black, and works very well with OLED displays.
The update turns the entire Instagram interface dark including the feed, stories and the discover tab.