Microwave chocolate chips, peanut butter and butter on High for 1 minute, stir. Microwave about 30 seconds longer or until mixture can be stirred smooth. Stir in vanilla.
Pour mixture over cereal, stirring until evenly coated. Put mixture in a 2 gallon resealable food storage plastic bag.
Add powdered sugar. Seal bag and shake until well coated. Spread on waxed paper or parchment paper to cool. Store in airtight container in refrigerator.
Keep in an airtight container.