In a microwave-safe bowl, combine chocolate chips, peanut butter, and butter. Microwave for 30 seconds at a time, stirring after each interval until completely melted and smooth. Stir in vanilla extract.

In a large mixing bowl, pour the Rice Chex cereal. Drizzle the melted chocolate mixture over the cereal, carefully stirring to ensure every piece is coated.

Transfer the coated Chex to a large resealable plastic bag. Add powdered sugar and shake until the Chex is evenly coated.

Spread the Puppy Chow mixture onto a baking sheet lined with parchment paper and allow it to cool completely.

Once cooled, break apart any clumps and serve in a bowl or store in an airtight container.