It's invoked when global.php is included, which is at the beginning of most scripts. As the name implies, most of the initialization has been done when it's called. If you want to know exactly where, it's in includes/class_bootstrap.php around line 117.
The hook is invoked inside a function, so if you're having trouble with variables you might try putting a global statement in your hook code for any variables you're trying to use.
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