Place butter, chocolate and peanut butter in a microwave safe bowl and microwave for 30 seconds. Stir. Continue microwaving in 30 second increments until melted.
Put cereal in plastic container or zipper bag. Pour chocolate mixture over cereal and stir gently.
Sprinkle 2 cups powdered sugar over cereal. Cover with plastic lid or zip bag and shake. Shaking is better than stirring at this point as you won't crush as much cereal.
Open container. If powdered sugar is dissolving, add a little more powdered sugar and shake again. Repeat until desired amount of powdered sugar.
