As the King Arthur site puts it in their diastatic malt powder product page…
Diastatic malt powder is the “secret ingredient” savvy bread bakers use to promote a strong rise, great texture, and lovely brown crust. Especially useful when flour does not have barley malt added, as is true for most whole wheat flour and many organic flours. Active enzymes in diastatic malt help yeast grow fully and efficiently throughout the fermentation period, yielding a good, strong rise and great oven-spring. Add only a small amount: 1/2 to 1 teaspoon per 3 cups of flour. Try using it in yeasted doughnut batter or in soft pretzels!
Actually, diastatic malt is the secret ingredient added by millers that’s in most of the flour that you can buy in a grocery store – even King Arthur flour. As the KA product description further states, “Especially useful when flour does not have barley malt added, as is true for most whole wheat flour and many organic flours.” I can attest to this: It really is useful.
But what is it?
Essentially diastatic malt powder is made from sprouted barley or wheat grains that are then heated to kill the sprouts but retain the enzymes (amylase) that break down starches into sugar, specifically glucose molecules. Yeast loves glucose!
Simply put, diastatic malt powder helps yeast feed, which helps them multiply, which means more yeast are feeding and multiplying, and helps produce more CO2 gas, giving your bread a better rise. In short, more food, more sex, more gas. 🙂
So the question is, should you use it?
It’s not a necessary ingredient, especially if it’s already in the flour you’re using. For instance, here’s the nutrition label for King Arthur Bread Flour:

If you look at the ingredients list, you’ll see that the last ingredient is malted barley flour. That’s diastatic malt powder. And though it’s not necessary, I’ve found that incorporating it into the flour blends that I use for sourdough loaves helps the rising action as I use 100% certified organic flour. It helps me manage the fermentation process a little.
I vary the amount I use depending on the weather. In cold, winter months like it is currently, I use about 2.5%. In warmer months, I’ll use 1%. But if it’s a really warm day or my starter is particularly active, I’ll dispense with it altogether. My aim with it is to maintain consistent rising times throughout the year, as I don’t have the luxury of baking in a temperature-controlled environment.
As far as taste is concerned, even at 2.5%, if there is any change to the taste of the bread, it’s very subtle. I have noticed though that when I use more of it, my crusts seem to be a little more pliable. But that’s more a hypothesis and perception than actual fact. I’d have to do side-by-side tests.
It is purported that diastatic malt powder produces a softer crumb. To be honest, I haven’t noticed a significant difference in the crumb when I use it. I develop my dough and use specific blends of flour and bake my bread to no more than 195ºF to always achieve a soft, moist, and springy crumb so it’s very likely any influence on the softness will be subtle at best for my bread.
And as far as subtlety is concerned, bear in mind that diastatic malt’s effect on the rising action is also subtle. It’s not as if your yeast going to go crazy when you use this stuff. It does give the yeast a little boost, that’s for sure, and in bread that’s risen with commercial yeast, they will be noticeably more active as things will happen faster (which is why I never use when I make baguettes). But you’re not going to suddenly see huge Tartine-like holes in your bread when you use it. That’s more due to technique and high hydration than the rising action of the yeast.
I recommend using diastatic malt powder. But use it sparingly and experiment with it to see if it works for you. As I mentioned, its effect is subtle, but used judiciously, can be quite useful to your baking process.