Catalyzes the demethylation of diphthine methyl ester to form diphthine, an intermediate in diphthamide biosynthesis, a post-translational modification of histidine which occurs in translation elongation factor 2 (EFT1 and EFT2). Also plays a role in the regulation of the retromer complex and is required for the recycling from endosomes of plasma membrane proteins like CAN1 and MUP1. Identified in a screen for mutants with decreased levels of rDNA transcription. diphthine methyl ester-[translation elongation factor 2] + H2O = diphthine-[translation elongation factor 2] + H(+) + methanol Protein modification; peptidyl-diphthamide biosynthesis. Interacts with CAN1 and RTT10. Recruited to endosomes in cells in which increased recycling of internalized plasma membrane proteins occurs. Accumulates diphthine, the last intermediate in the diphthamide biosynthesis pathway. Increases the interaction of DPH5 with elongation factor 2. Present with 2640 molecules/cell in log phase SD medium. Belongs to the DPH7 family. Was originally (PubMed:19965467) thought to be required for the first step of diphthamide biosynthesis but further studies (PubMed:22188241, PubMed:23468660) clearly suggest that it is involved in the third step of diphthamide biosynthesis.