PWM pulsing LED hooked up to DAC and Oscilloscope

I have a spi bus connecting my arduino, XMEGA Xprotolab mini oscilloscope and AD420ANZ 16-bit DAC. My LED is connected to a potentiometer that varies the frequency from 1-4 Hz, that is the pulsing of the LED speeds up and slows down as the potentiometer is turned. (The LED is in pin 9, using PWM to pulse)
Currently, I have my LED hooked up to the oscilloscope in channel 2 with 5V from the arduino in channel 1, and I can see the difference between the PWM of the LED (on the LCD I can see the duty cycle speed up as i turn the frequency up) and the 5v analog signal from the oscilloscope (oscilloscope has built in DAC converting the 5v).

I am just wondering if its feasible to connect the LED to the DAC, have it convert the signal from digital to analog, then shift the data from the DAC to the oscilloscope via spi bus? I want to be able to compare two analog signals, not an analog and digital signal.
Also, would using shiftin() and shiftout() work in this case?

You want to compare the 8-bit, 490 Hz PWM LED, with brightness controlled by variable width pulses, against a 16-bit, SPI at probably 4 MHz DAC output, which will look like a changing DC level?

I want to be able to compare two analog signals, not an analog and digital signal.

I'd suggest an R-C filter to "smooth" the PWM.

am just wondering if its feasible to connect the LED to the DAC, have it convert the signal from digital to analog, then shift the data from the DAC to the oscilloscope via spi bus?

No... I don't know of a DAC that can "read" PWM data. However, your firmware "knows" the PWM setting, so you can send that digital value to the DAC.

Also, would using shiftin() and shiftout() work in this case?

You can't shift analog signals, and it would take some "tricks" to shift PWM. (i.e. You could syncronize the PWM and the serial clock.)

Currently, I have my LED hooked up to the oscilloscope in channel 2 with 5V from the arduino in channel 1,

There is no "information" in constant 5VDC, so I don't understand why you are reading it.