the vet has diagnosed my dog with the following conditions
1 - dilated cardiomyopathy
2 - diabetes insipidus

can anyone tell me how these two diseases effect each other and do they make each other worse.

The best person to ask this question to would have been your veterinarian. SInce cardiomyopathy deals with the heart and the diabetes insipidus deals with the kidneys, I can only assume that they would interconnect with each other on some levels, but the vet would be able to explain each ailment and would be able to give you a prognosis.