1) Pour cereal into large bowl;set aside.
2) In 1-quart microwave-safe bowl combine chocolate chips, peanut butter and butter.
3) Microwave at 100% power for 1 to 1 1/2 minutes or until smooth, stirring after 1 minute.
4) Stir in vanilla.
5) Pour chocolate sauce slowly over cereal, stirring to coat evenly. Pour cereal into large plastic bag.
6) Add powdered sugar and secure; shake to coat well. Spread on waxed paper to cool.