When would you consider a kidney biopsy in a patient with longstanding diabetes and hypertension (baseline creatinine 4-5, 4+ proteinuria) who was recently found to have dsDNA positivity?   

Only if something changed clinically, urine protein abrupt increase, hematuria microscopic, increase in trajectory of creatinine, or symptoms suggestive of SLE.  I feel bad when I biopsy a diabetic only to find diabetic nephropathy, but if you never find diabetic nephropathy, you aren't doing ...