Create Image Element And Onload

If I create an image element using the DOM methods and assign it an onload event handler, at what point is the image actually loaded and the event handler run?

So, given the following and assuming that "parent" references a node already in the document:

var elm = document.createElement("img");
elm.src = "myuglyface.jpg" // #1

addEvent(elm, "load", myHandler, false); // the standard cross-browser event adding mechanism

parent.appendChild(elm); // #2
Does the loading of the image begin at #1 or #2, ie when I first reference it or when it is added to the document? Can I even add an event handler at the point I do so?