Diego is the leader of the Oberon Dawn, an elite mercenary group that is stationed within Palanthas. He is not the creator, but has lead the Oberon Dawn for nearly 20 years. He is a master of both the arcane and sword, and serves as instructor just as much as he does leader. He is especially close to Khazin and Kyles.
UPDATE: Deceased. Sacrificed himself to save Khazin and his party.