Does Dispose still get called when exception is thrown inside of a using statement?

Yes, using wraps your code in a try/finally block where the finally portion will call Dispose() if it exists. It won't, however, call Close() directly as it only checks for the IDisposable interface being implemented and hence the Dispose() method.

See also:

• Intercepting an exception inside IDisposable.Dispose
• What is the proper way to ensure a SQL connection is closed when an exception is thrown?
• C# "Using" Syntax
• C# USING keyword - when and when not to use it?
• 'using' statement vs 'try finally'
• What is the C# Using block and why should I use it?
• Disposable Using Pattern
• Does End Using close an open SQL Connection

This is how reflector decodes the IL generated by your code:

private static void Main(string[] args)
{
    SqlConnection conn = new SqlConnection("...");
    try
    {
        conn.Open();
        DoStuff();
    }
    finally
    {
        if (conn != null)
        {
            conn.Dispose();
        }
    }
}

So the answer is yes, it will close the connection if

DoStuff()

throws an exception.