[php-list] Scope in functions

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Hello all,
             I want to re-itinerantly or re-cursively call a function from 
within itself and I am wondering about the scope of non-global variables in 
the function?

example -

function foo($string)
  {
  if (strpos($string, "#") === FALSE){return $string;}
  $result = substr($string, 0, strpos($string, "#"));
  $result .= substr$($string, strpos($string, "#") + 1);
  return foo($string);
  }

Will php create a new instance of each variable within the function each 
time it is called from within itself ?

Thanks, Rob.