Difference between declaration of instance operation outside & inside

Whats the difference between a and b

what will happen if i call new instance outside and inside
a)
datacontext dc=new datacontext()
public function collect_names()
dc.LLO_collection_SP()
return dc
end sub


b)
datacontext dc
public function collect_names()
dc=new datacontext()
dc.LLO_collection_SP()
return dc
end sub