Yeah, admins on your instance can read the entire conversation of both sides. Since it's all unencrypted there's probably a way to capture DMs sent between instances as well.
our dms are still better than fedi/mastod tho right?, but just use oxchat if you need to dm and get that nip17 badge thingy that you can only see on nostr:npub189j8y280mhezlp98ecmdzydn0r8970g4hpqpx3u9tcztynywfczqqr3tg8 lol
Discussion
i think bsky is like that too, its kinda like telegram, messages arent encrypted but as long as the ui is nice and the app is snappy fast nobody cares