Pour cereal into large bowl and set aside.
In a 1-quart bowl combine chocolate chips, peanut butter and butter. Microwave on HIGH for 1 1/2 minutes or until smooth, stirring after one minute. Stir in vanilla.
Pour chocolate mixture over cereals, stirring until all pieces are evenly coated. Pour cereal misture into a large resealable plastic bag with powdered sugar. Seal securly and shake until all kpieces are well coated. Spread on waxed paper to cool.