Backlinks Diagram, is this how they work?

New to SEO and trying to understand precisely how back links work.

Lets say I have a website about making muffins, landing page is makemuffins_com

In Example A: on the landing page there is anchor text for making blueberry muffins and cinnamon muffins, which link to other websites (blueberrymuffins_com and cinnamonmuffins_com) from my landing page .

In Example B: Instead of the landing page linking off site to other websites, the other websites now link back to me. That is cinnamonmuffins_com and blueberrymuffins_com link back to my landing page makemuffins_com

Which of the above, if any, is the correct way to get + reputation with google via back links?

Thanks in advance.

Please note I had to remove the . with _ in _com to get around new member filter thinking I was trying to spam website advertisements

This made... birds fly around my head........

Example B is what you should aim for. Lookout for website to place your muffin website link. Backlinking is like Voting system. The more votes(backlinks) you get the better chance of you to rank no 1. There are lots of variables too like the quality, quantity etc. But the main thing is getting links from "relevant" sites like how you said here if you have a muffin website get "contextual links" from another muffin website.

The only way to gain reputation(Or a better word Authority) is to get good quality backlinks which are relevant to your site. I would say you you better search the better to learn more about SEO as 1 thread won't resolve your problem. So use the search!

So where can i get these muffin's you are talking about... i'm hungry.