Hello, panthripu;
A DataBlock (DB) is an area of S7 CPU memory than can be reserved and configured for the use of a program. If you use a "Shared DB", you configure it for your own needs. If you program a Function Block (FB), an "Instance DB" is generated, based on the structure of the memory requirements of the FB.
I suggest you read (and practice) a Siemens document called "Working with Step7"; it comes in PDF format and is included with the documentation of your Step7 (Start--> Simatic--> Documentation--> English--> Working with Step7). This should give you a good start.
Hope this helps,
Daniel Chartier