When you have completed Story mode save the file and go to the 'Main' menu and select 'Extras'. Then load your saved game file and choose 'Dragon Challenges'. Beat the 5 challenges and the game will inform you that you have unlocked Dark Spyro. Return to the 'Main' menu and load your game again and save it and select Dark Spyro by using the element change button. Dark Spyro is last in the elements sequence.