Is DC modulated with a sine wave actually AC?
It's all a matter of perspective and relativity. What you have is really a 10V  Pk-Pk AC level superimposed on a 5V DC level. So the answer is yes. But I agree the term alternating is muddy in this case.

However, when we remember that voltage is a relative term it makes more sense. 

If we think of AC like the classic point on a wheel spinning round the sinusoidal AC part is easy to imagine. But if we extend that and mount that wheel on top of a moving trolley we get your scenario. If you are standing on the trolley you see the dot going backwards, if you stand on the ground, you don't.

The term "Modulation-Current" might be more appropriate..

Which brings up a another question...

Why do we say alternating current not alternating volts.. which is the units we are usually quoting? e.g 110V AC