Pour cereal into large bowl.
In a smaller, microwave-safe bowl, combine the chocolate chips, peanut butter, and butter.
Microwave for 1 minute, then stir until smooth. Microwave in additional 15-second increments if needed, stirring thoroughly after each.
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.
Let cool, then store in the zip top bag until ready to serve.