In a medium bowl, add chocolate chips, peanut butter, butter, and vanilla, and microwave on high for 1 minute and stir. Microwave in 15-30 second increments, stirring each time, until the mixture is smooth. Do not overheat (or chocolate may seize).
Pour chocolate over the cereal and toss to coat.
Add powdered sugar and toss to evenly coat*.
Spread the cereal on a parchment lined baking tray. Allow it to rest for about 30 minutes before serving.
Notes
*Another method is to put the chocolate coated cereal in a large zip top bag. Add the powdered sugar and shake to evenly coat. (If you don’t have a large enough bag, you may need to do this in batches.)
Once coated, release any extra sugar by shaking in a fine mesh strainer.
Avoid overheating the chocolate. If it becomes grainy add more peanut butter or butter and reheat slowly, stirring frequently until smooth again.
Bake Puppy Chow pieces on a cookie sheet for 15 minutes for extra crunch.
Store in an airtight container in the refrigerator or at room temperature for up to 5 days.