Hi jero
When you look at the LED, the brightness varies between off and fully bright. The brightness appears to take on a range of different levels, not just "off" and "on". For this reason, you can think of it as analog.
The way the program does this is by switching a digital signal on and off very quickly (too quickly to see) and changing the ratio of the on time to the off time. The more on time, the brighter the LED appears to be. So the voltage being fed to the LED is either +5V or 0V, no values in between. In that sense, it is a digital signal.
Regards
Ray