In a smaller, microwave-safe bowl or medium saucepan, combine the chocolate chips, peanut butter, and butter.
1 cup chocolate chips, ½ cup peanut butter, 6 tablespoons butter
If microwaving, microwave for 1 minute, then stir until smooth. Microwave in additional 15-second increments if needed, stirring thoroughly after each. If melting on the stovetop, heat over medium-low heat, stirring frequently, until melted and smooth.
Pour over cereal and mix until the cereal is well coated.
Pour the coated cereal into a gallon-sized zip top baggie, add the powdered sugar, seal the bag and shake until cereal is well coated.
2 cups powdered sugar
Cool completely, then store in the zip top bag until ready to serve.
Notes
If using bar chocolate, chop it before melting it to ensure it melts evenly.The chocolate, peanut butter, and butter can be melted on the stove over medium-low heat instead of the microwave.