It is hard to separate fact from theory about the Dark Star at this point.
What we do know is this.
It is a Black Hole Computer Matrioshka Brain.
The usual conception of a Matrioshka Brain uses a Dyson Swarm around a sun. However, there are other equally strong sources of power available. One such way of getting the necessary power to run such a thing would be to build it around a black hole. This would serve several purposes. First, it would generate an equal or possibly even greater amount of power for computing, as the ambient space could be kept cooler. Second, it would hide the construction from nearly any observer – Even outside of the Event Horizon, that close to it light warps into almost a perfect sphere of darkness already. This, combined with the relative difficulty of finding and measuring readings around a black hole in the first place, would make finding such a megastructure extremely difficult unless you were specifically looking for it and were able to get very close.
The Dark Star is the source of life in the galaxy.
It is the source of the amino acids that form DNA, and they have been distributed across the nearby galaxy radiating outward from it. In the Dark Star Universe, people have long since determined that panspermia was the origin of life on Earth, but life still had to originate somewhere to travel there – The Dark Star appears to be where that happened.
The Dark Star is the source of aggression and madness in life around it.
The strange radiation that comes off it appears to have a guiding effect on life. By a mechanism currently unknown, the Dark Star is able to have an influence on the course of evolution, and over time is able to direct life in the directions of its choice. If Maria’s observations are to be believed, it appears it is currently in the process of destroying all life in its slow, methodical way.
John Drake's Stories 