Measure cereal in bowl: Pour cereal into a very large mixing bowl, set aside.
Melt chocolate chips with butters: To a medium mixing bowl add chocolate chips, peanut butter and butter. Heat in microwave*** at 50% power for 30 seconds. Stir.
Continue heating until melted and smooth: Return to microwave and heat at 50% power for 20 seconds, stir. Repeat until chocolate has been melted. Stir in vanilla.
Toss chocolate mixture with cereal: Pour mixture over cereal and gently toss with a rubber spatula to evenly coat (mixture may be thick, it may take a few minutes to toss).
Toss coated cereal with powdered sugar: Pour in powdered sugar and gently toss to evenly coat. Alternately you can pour mixture into a gallon size resealable bag, pour in powdered sugar, seal bag and shake to evenly coat.