How does Instagram use django?

IOS is the "Frontend" of the application. Django is a backend "Server Side" Web Framework.

For example, if there is an iPhone application that shows you all the latest tutorial videos about baking (lets say you had a website bakingtutorials.com), you would make an iPhone application in objective-c to run as the frontend. In your objective-c iPhone code, you would communicate with a "server" which runs Django/Python. The Server Side (Django) holds the video and other baking data in a database. The Frontend iOS application requests data from the Django application. Client Side & Server Side communication. This is usually accomplished with a RESTful API - which in basic terms, means the iPhone application uses human-readable URLs to grab data from Django/the server's database. This data is sent to the frontend from the server where it is parsed by objective-c and formatted for the application

Instagram uses it for its website and MAYBE for the API. But there's no official information about that.

And yes, you're right: iOS apps are done in objectiveC