Is it true that when you try to lose weight, when you exercise your body steals muscle from you? Should I lose weight first and then try to?

I recommend to Try eating small meals through out the day while working out so you don't lose muscle mass.

It all depends on what exercise and your diet. If you exercise and your diet is crap, high fat, high carb then you are gonna have a hard time losing fat. If you eat higher protein and lower carb then you dont need to worry about muscle loss.

No. You are very confused. If you STARVE your body, it will take fuel for any source it can find -- including muscle and vital organs. If you eat a calorie-deficit diet that provides your body with the right nutrients, your body will be forced to burn stored fat.

Millions of people combine calorie-deficit dieting with exercise to lose fat while building muscle.

You body only takes muscle tissue when you haven't eaten anything. You can still eat food and lose weight; the trick is to eat and exercise at the correct times.

if you stop eating you'll lose muscle. Try eating and working out

I recommend you go to youtube and type in dr berg. He has some great videos on weight loss and how your organs affect your ability to lose weigh, and what to do about it. You want to lose the fat, not the muscle, of course. The best diet I have seen for weight loss is a ketogenic diet.

and what do you think your body does with the muscle it "steals"?
the short answer is no.