Yup, you're right Dan. So, its AC.
In order to regenerate or save the braking energy, an extra inverter is necessary which is facing backward. Or, to say it another way, it gets its input from the DC bus and inverts that excess energy back into the AC supply synchronously at 60hz.
It only operates when the DC bus voltage rises higher than a set limit. A DC bus voltage higher than normal indicates that the motor is being overhauled or pushed turning it into a generator and sending power backward to the drive. The drive's output IGBT's would not normally pass this energy back to the DC bus but the presence of flyback diodes in parallel with the IGBT's makes the power show up on the DC bus as rising voltage (the capacitors are being charged up with the excess energy).