This paper describes an all-digital backscatter modulation approach leveraging delta-sigma modulation (DSM) to improve the in-channel spectral characteristics of orthogonal frequency division multiplexed (OFDM) backscatter communication. We demonstrate through numerical simulations and experimental validation that DSM can improve the spurious-free dynamic range (SFDR) of OFDM subcarriers generated by a low-resolution impedance digital-to-analog converter (DAC), such as an RF switch having two or four different impedance states. We present the design and validation of a prototype OFDM backscatter uplink with DSM implemented with all-digital logic in an FPGA. A single-pole-four-throw CMOS RF switch (i.e. 2-bits of impedance DAC resolution) serves as the backscatter modulator. We experimentally validated the DSM approach with a 2.4 GHz, five-subcarrier OFDM backscatter uplink and a four-times oversampling DSM at up to 1.25 Mbps. In this scenario, the DSM improved the SFDR by 43 dB within the subcarrier band while reducing the overall noise floor in the same band by 11.3 dB. These results confirm that a DSM approach can be used to control quantization noise and improve the spectral characteristics of low-resolution digital impedance modulators for backscatter communication in scenarios where in-channel SFDR is more important than wideband noise performance.