How to make a copy of an existing site?

I have a Dolphin site with some modifications in PHP code and MySQL database. Now I would like to copy my site and this new site would become my test environment. How to do that?

I guess I should:

1) Copy ale the files to the new location

2) Copy database to the new location

3) ... (what to change in order to connect files to the new database?)

Or perhaps this way is better?

1) Copy ale the files to the new location

2) Upload Dolphin folder "install" to the new location

3) Install Dolphin

4) Drop database and import the database from the original site

5) Compile language files?

Step 4:  Create new DB with username & pw. 

Step 5:  Move the old DB to the new one.

Step 6:  Change your inc/header.inc.php file to recognize the new DB credentials.

Trust us, musch easier to copy/move the files & db than to try to re-install and then import the DB from the old, to many tables will be different if you've done lots of upgrades.