represents the ASCII "carriage return" character (ASCII code 13, which is D in hexadecimal), sometimes written "\r", rather than the "linefeed" character, "\n" (which is ASCII 10, or A in hex). Note that when SimpleXML is asked for the string content of a node (with (string)$node or implicitly with statements like echo $node) it will turn this "entity" into the actual character it represents.
Depending on your platform (Windows, Linux, MacOS, etc), the standard line-ending, accessible via the built-in constant PHP_EOL, will be either "\n", "\r\n", or "\r".
The safest way to replace these with HTML linebreak tags (<br>) is to replace any of these characters, since you don't know which convention the source of the XML data might have been using.
PHP has a built-in function which should be able to do this for you, called nl2br(). If you want a slightly custom version, there's a comment in the docs from "ngkongs" showing how to use str_replace to similar effect.