Electrical discharge machining (EDM) is extensively used for machining difficult-to-machine materials and complicated shapes. Its performance in terms of material removal rate and surface roughness is usually analyzed using the process parameters such as setting voltage, setting current, pulse on time, and duty factor. It is well known that interelectrode gap condition controls the EDM performance, and it is difficult to observe the gap phenomena directly. Literature reveals that the combined influence of pulse types and their individual contributions on material removal rate and surface roughness has been ignored. In the present work, rough and finish EDM conditions are identified from a large set of 125 experiments carried out on hardened D3 die steel. From the voltage and current pulse trains in each regime, pulse characteristics and five different pulse types are assessed by a unique thresholding approach. Based on the pulse details, two new parameters such as energy expended (E) at the electrode gap over a second and a performance factor (PF) giving ratio of energy associated with the sparks to total energy expended have been proposed. It is found that a higher PF of 0.757 at a relatively lower expended energy of 113.7 J leads to a favorable condition in rough machining. A relatively lower E of 29.7 J and a higher PF of 1.00 are favorable for finish machining. Cross-sectional images of the ED machined workpieces are also included as evidences. The proposed thresholding methodology has a potential for online monitoring, analysis, and control of EDM process. © 2018, Springer-Verlag London Ltd., part of Springer Nature.