C# – Passing By ref and out

So if I am iterating using a foreach loop and I have a function inside that takes an argument of the object iterated from list, and lets say i set its value to be different.
Why don't I have to use out or ref ? I thought it was only passed by value if it you didn't use out or ref…. I know that a ref you must have initialized the variable before and out you just have to have set its value before return from the method.

It seems like if you a iterating thru a list and pass an object in its actually passed by reference. Consider the following example.

Example

class Program
    {
        static void Main(string[] args)
        {

            List<Foo> list = new List<Foo>();
            list.Add(new Foo() { Bar = "1" });
            list.Add(new Foo() { Bar = "2" });



            foreach (var f in list)
            {
                Foo f2 = f; 
                Console.WriteLine("SetFoo Pre: " + f2.Bar);
                SetFoo(f2);
                Console.WriteLine("SetFoo Post: " + f2.Bar);

                Console.WriteLine("SetFooRef Pre: " + f2.Bar);
                SetFooRef(ref f2);
                Console.WriteLine("SetFooRef Post: " + f2.Bar);
                Console.WriteLine("");
            }




            Console.WriteLine("");

            int i = 0;
            // Not using ref keyword
            Console.WriteLine("SetI Pre: " + i);
            SetI(i);
            Console.WriteLine("SetI Post: " + i);

            // Using ref keyword
            Console.WriteLine("SetRefI Pre: " + i);
            SetRefI(ref i);
            Console.WriteLine("SetRefI Post: " + i);
        }


        private static void SetRefI(ref int i)
        {
            i = 3;
            Console.WriteLine("SetRefI Inside: " + i);
        }

        private static void SetI(int i)
        {
            i = 2;
            Console.WriteLine("SetI Inside: " + i);
        }

        private static void SetFooRef(ref Foo f)
        {
            f.Bar = String.Format("{0} :: {1}", f.Bar, "WithRef");
            Console.WriteLine("SetFooRef Inside: " + f.Bar);
        }

        private static void SetFoo(Foo f)
        {
            f.Bar = String.Format("{0} :: {1}", f.Bar, "WithoutRef");
            Console.WriteLine("SetFoo Inside: " + f.Bar);
        }
    }


    class Foo
    {
        public string Bar { get; set; }
    }

Output:

SetFoo Pre: 1 SetFoo Inside: 1 ::
WithoutRef SetFoo Post: 1 WithoutRef
SetFoo Pre: 1 :: WithoutRef SetFoo
Inside: 1 :: WithoutRef :: WithRef
SetFoo Post: 1 WithoutRef :: WithRef

SetFoo Pre: 2 SetFoo Inside: 2 ::
WithoutRef SetFoo Post: 2 WithoutRef
SetFoo Pre: 2 :: WithoutRef SetFoo
Inside: 2 :: WithoutRef :: WithRef
SetFoo Post: 2 WithoutRef :: WithRef

SetI Pre: 0 SetI Inside: 2 SetIPost: 0

SetRefI Pre: 0 SetRefI Inside: 3
SetRefI Post: 3

I understand the ref with the integer example but not the above Foo object iteration example.

Thanks!