So this means a 50% duty cycle. Am I right?
Yes that is correct.
Then, if I have an output of 5V and a duty cycle of 50%, if I measure the voltage with a DVM, I get 2.5V
That is true but it is misleading, it makes you conclude:-
This means I am driving the laser (or whatever I have connected) with 5V or 2.5V?
Measuring a PWM voltage on a DVM is very misleading. You are always driving with 5V.
The fact that it is PWM means it is 5V and 0V rapidly, but the peak voltage is still 5V and it is that peak voltage that matters in things like voltage ratings. If you were driving an LED or heater than the average voltage of 2.5V is what would matter.
Read this page of mine, it might explain it better, especially the animated PWM diagram.
http://www.thebox.myzen.co.uk/Tutorial/PWM.html