Place cereal into a large bowl. Set aside.
Place chocolate chips, peanut butter and butter in a large microwave safe bowl.
Microwave for 60 seconds and then stir until smooth. If the chocolate chips haven't melted enough, microwave at 30 second intervals, stirring in between, until the mixture is completely melted.
Stir in vanilla extract.
Pour the chocolate mixture over the chex cereal and stir together gently with a spatula. DO NOT OVER MIX. The chunks are the best part! The cereal pieces should be completely coated in chocolate, but it's ok for a few to clump together.
Pour the powdered sugar over the mixture. Use as much or as little as you like, but I think this is best when no chocolate shows through. Gently stir to combine. Again, don't over mix.
Enjoy immediately or store in an airtight container!