strpos VS mysql_query

Now I have a text file that have about 1 milion lines. Each line have about 100-150 chars, start with a md5 str. In database have about over 1 milion row, now I need to check that which row is NOT IN text file, and then remove it.

My friend told me use this method:
- set a check-field to false
- query 1 milion lines from text file to db, set true to that row
-  and then run a query that remove every row that have check-field = false.

But I'm now currently using follow method:
- query all database, insert into variable
- loop through variable and use strpos() to check that row have in text file or not; if not run query remove it


I dont know which method is better ?

Thanks for reading and sorry about my bad English.
Bonmat86