When you compile an application, the MSIL code created is stored in an assembly . Assemblies include both executable application files that you can run directly from Windows without the need for any other programs (these have a .exe file extension), and libraries (which have a .dll extension) for use by other applications.

There are mainly two types to it:
1.Private Assembly: The dll or exe which is sole property of one application only. It is generally stored in application root folder
2.Public/Shared assembly: It is a dll which can be used by multiple applications at a time. A shared assembly is stored in GAC i.e Global Assembly Cache.