Place the butter, chocolate chips and peanut butter in a large microwave-safe bowl.

Heat for 45 seconds in the microwave and then stir. Return to the microwave and heat in 30 second increments until it is fully melted and runny. (Usually a total of 75 seconds works for me.)

Stir in the vanilla.

Gently fold in the cereal until all the squares are well covered with the chocolate and peanut butter mixture.

Put 1/2 cup powdered sugar in a gallon-sized zip-top bag.

Add 3 cups of covered cereal into the bag with the powdered sugar and shake. Break up clumps of cereal from the outside and make sure all the pieces are well coated. (You can add more powdered sugar if needed.)

Transfer to an airtight container and enjoy!