If the question is specific to Saxon then it's probably best to ask on the saxon-help mailing list or forum.

The commercial edition of Saxon, Saxon-SA, includes an XML Schema processor. This allows you to validate instance documents against an XSD schema definition, and also to write schema-aware XSLT stylesheets and XQuery queries, which means that type information from the schema can be used to assist in compiling the query (giving the potential better diagnostics and better performance).

Like stylesheets and queries, schemas are processed once into an internal form so that they can be used repeatedly; this process is often called "compiling", though it does not actually generate executable code (in the case of a schema, it generates a finite state automaton which can be used to validate instance documents against the grammar defined in the schema.)

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Michael Kay
http://www.saxonica.com/
Author, XSLT 2.0 and XPath 2.0 Programmer\'s Reference