Where does Itunes store the music files

When I drag an Mp3 album file into I-Tunes i cant seem to find where it has saved it. ie where is the I-Tunes library. I have just rebooted my PC and all the old Itunes files were stored in a folder, which I had to drag back into the reinstalled Itunes. But I cant find where it has stored it. Sorry for such a noob question but im getting a might confused about How Itunes works. before I rebboted anything I added to Itunes i could find in a certain folder, and used this folder as a backup. But now I have added a new album of Mp3's and i cant find it in the backup folder.....I have set the ITUNES MEDIA FOLDER location to my backup folder but it still isnt in there, can anyone straighten this one out for me ?????