Use inside class versus outside class

Recently, I've had to put Use inside a class but I've always seen it put outside the class. What's the difference? When do I need to put it inside and when do I need to put it outside? If I put it outside, I get an error saying that I have an undefined method.

class MY_Controller extends CI_Controller
{
	use Auth;
}

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use Auth;
class MY_Controller extends CI_Controller
{
}

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