what happens to my music when i reset my iphone

If you do a full restore everything on the phone will be lost on the phone, but presumably you have your music in your music library on iTunes or iCloud and are syncing it to the phone? So you would just re-sync it. If you are using the new Music service it is all streaming anyway so nothing is locally on the phone.

No data is lost from a reset but if you mean you are restoring your iPhone to factory settings, that deletes your everything.