"Dün daha iyiydim."

I believe this used to be a separate verb imek.

So you had Dün daha iyi idim.

The i drops after consonants, but remains after vowels (turning into y), when you add it to adjectives or nouns.

There is an explanation in the "tips and notes" (below the lesson list when you click on this skill from the tree). Very much along the same lines as mizinamo's, with more details and examples. Check it out :)

iyi - good

daha iyi - ("more good" =) better