Melt together peanut butter, butter and chocolate chips in a medium-sized microwaveable bowl.
Once the mixture is melted, stir together until you have an even mixture.
Pour the cereal in a large mixing bowl that has a lid.
Coat the cereal with your chocolate/peanut butter mixture. Mix together well until all cereal is coated (be careful not to crush cereal too much)
Once all of your cereal is coated, pour the powdered sugar into the mixture, 1 cup at a time. You can mix it in with a spoon or spatula, but I prefer to put the lid on the bowl and shake it up. I find it works better this way. I simply keep adding the powdered sugar until the cereal is coated to perfection.