Mission scientists for the Duna I craft began to notice anomalous readings in the gravimeter data when the craft was farthest from Ike. After taking time to study the readings and ensure it wasn't some sort of data corruption, the team announced that something was tugging on Duna I, so weakly however it was only noticeable when Duna I was furthest from Ike. The announcement spurred astronomers around the world to begin searching for an as-yet-undiscovered small body in orbit around DUna, but it was Duna I which ultimately discovered the new body during an imaging pass of Ike - you could barely see the brown dot near the corner of the image. With a more precise location nailed down, the Kerbin Astronomical Society was quickly able to gather more data on the body, now designated Phos, and officially cataloging it as a moon of Duna.
Phos is very small, only about half the size of Eve's moon Gilly, but still has enough gravitational influence to allow for orbiting craft. It is unknown still when it was captured, or what interaction between it, Ike and Duna placed it into its current orbit. The current photo is the best image we have of the small body, future missions to Duna or orbiting telescopes may be able to get better resolution.
