If I may add to this:
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.
But depending on the ratio of on time to off time, average voltage is a value between 0 and 5V, so in that sense it's analog. (0% on time = 0V, 100% on time = 5V, 50% on time = 2.5V on average.)