Place cereal in a large bowl and set aside. In a medium microwavable bowl, add chocolate chips, peanut butter and butter. Microwave on high for 1 minute and stir. Microwave for 30 seconds longer and stir mixture until smooth. Stir in vanilla.

Pour sauce over cereal and stir until evenly coated. Spoon half of the mixture in each 1-gallon re-sealable Ziploc bag. Add 3/4 cup powdered sugar to each bag, and seal. Shake the bag until everything is coated. Spread on waxed/parchment paper to cool. Store in airtight containers in refrigerator.

Note: for a gluten-free variation, use only Chex corn and rice cereal. And please check your vanilla extract to make sure it is gluten-free, otherwise omit it.