Diaphragm or Iris: Many microscopes have a rotating disk under the stage. This diaphragm has different sized holes and is used to vary the intensity and size of the cone of light that is projected upward into the slide. There is no set rule regarding which setting to use for a particular power. Rather, the setting is a function of the transparency of the specimen, the degree of contrast you desire and the particular objective lens in use.
How to Focus Your Microscope: The proper way to focus a microscope is to start with the lowest power objective lens first and while looking from the side, crank the lens down as close to the specimen as possible without touching it. Now, look through the eyepiece lens and focus upward only until the image is sharp. If you can't get it in focus, repeat the process again. Once the image is sharp with the low power lens, you should be able to simply click in the next power lens and do minor adjustments with the focus knob. If your microscope has a fine focus adjustment, turning it a bit should be all that's necessary. Continue with subsequent objective lenses and fine focus each time.