Combine peanut butter, butter, and chocolate chips in a microwavable bowl.
Microwave for 1 minute, then stir until melted and creamy.
Add vanilla and stir.
In a large bowl with a cover, pour chocolate mixture over cereal. Cover and shake until cereal is evenly coated.
Sprinkle powdered sugar over cereal. Cover and shake until evenly coated.
Add M&Ms and sprinkles of your choice.
