Diego was born into the Pack, a tribe of raiders which made up one-third of the notorious triumvirate controlling the abandoned Nuka World theme park west of Boston. Ultimately reporting to park's Overboss, the Pack was led by its self-styled "alpha", Mason, and followed a survival of the fittest doctrine that rewarded obedience and violence, whilst harshly punishing perceived weakness. Diego's mother was a lower-ranking member of the Pack. He has no idea who his father was, although that isn't exactly uncommon; it's likely that he was a member of one of the other Nuka World gangs.
In the Pack, it wasn't unusual for an ineffectual leader to be supplanted by a younger challenger in single combat - loyalty and ambition weren't seen as mutually exclusive concepts. When he was eighteen, Diego issued an audacious leadership challenge to the aging Mason. Despite being younger and faster, Diego lost the bout by a wide margin. Beaten, humiliated, and exiled from the park, an injured Diego limped his way back to Boston.
Diego spent several long and lonely weeks scavenging out of the ruins of Lexington, as he healed from wounds that should have killed him. Home to several factions of warring raiders, Boston's outlying suburbs were a dangerous place to be even for someone in peak physical condition. Diego survived the spring months by sheltering in the [TK], but he missed the sense of security and belonging that came from being part of a larger group.
He subsequently joined a rag-tag group of raiders who had set up in the old Corvega assembly plant, but found them to be a poor replacement for his Nuka World family: unlike the Pack, Diego's new raider brothers had no set code of conduct, and there was no sense of brotherhood between them. The group regularly harassed caravans in and around Lexington, sometimes hunting lone travelers for sport, and skirmished near-constantly with other neighbouring raider groups, something that Diego particularly detested. Despite his attempts to assert his dominance, the raiders' hierarchy was an unfamiliar and unstable landscape, with the balance of power seeming to shift by the day. It was enough for Diego to just hold his own amongst his chaotic new "family".
In 2287 the group received news that the survivors of the Quincy massacre were due to pass through nearby Concord, led by a former low-ranking Minuteman named Preston Garvey. The raider's leader had long held a particular interest in the Quincy survivors, most notably a woman called Mama Murphy, whom he believed to be a powerful - and valuable - clairvoyant. Diego and his fellow raiders were dispatched to intercept the group, something that should have taken, at best, no more than a day. However, when they arrived in Concord, they found the survivors holed up in the old Museum of Freedom. A firefight ensued, the noise of which attracted a deathclaw living in the sewers beneath Concord. The creature lay waste to Diego's comrades, forcing him to seek shelter inside the Museum. He was promptly captured by the other survivors, and would have been killed by them had Garvey not spoken in favor of granting him clemency.
Since then, Diego has been kept under lock and key, grudgingly helping the Quincy survivors to rebuild the former suburb of Sanctuary Hills. Good with his hands and quick to follow instruction, Diego has proven particularly valuable in keeping the community safe from raider attacks. Over time, he's grown familiar with the fledgling community, and has come to respect Garvey's authority over him. Diego has found a certain sense of belonging amongst the Quincy survivors, even as he struggles to understand their unfamiliar ways. However, with the Nuka World raiders pushing out into the Commonwealth for the first time, there may come a point where Diego has to choose between protecting the people who took him in, or bowing to the only family he's ever known.
Diego in Concord, shortly before his capture by Preston Garvey and the rest of the Quincy survivors.
A note on Ships
Despite the cultural differences between them, Diego/Preston is probably one of my healthier Fallout pairings; after a series of initial misunderstandings, Preston now makes sure to talk things out thoroughly. Diego was more or less raised to recognize power and authority, and there's definitely an element of that in his appreciation for Preston. Diego/Curie could probably have been a thing if it had happened before he and Preston got together. Now, Diego recognizes (or believes) that he's not nearly good enough for Curie. I'm not into an explicitly sexual version of the Diego/Mason dynamic, unless it's an AU situation.