Metallurgy Question: Download Metallurgy PDF

I was told (before the internet) by a swiss engineer (#2 in his class), that (1) if a heated bar of steel has one end dunked in water, that some of the heat in the bar will travel away from the water: conservation of energy. is this true? or (2) is the heat that is in the bar on the end away from the water, drawn towards the quenching, and cooled rather than having its temperature raised?