Measure cereal and pour it into a large mixing bowl.
Place the chocolate chips, peanut butter, and butter in a pyrex measuring cup (microwave-safe bowl). Microwave for 1 minute, let it sit for 1 minute, then stir. If it's not melted, repeat in 30-second increments.
Pour the chocolate mixture over the cereal. Gently stir until the cereal is evenly covered with the chocolate.
Transfer the chocolate-coated cereal to a large baking sheet lined with waxed paper. Sift some of the powdered sugar over it and then gently stir it some more. Repeat until all the powdered sugar is gone.
Refrigerate the pan to speed up the chocolate setting process.
To serve, arrange the puppy chow to a serving bowl.
I refrigerate the bags of Chocolate Chex until it's ready to be served. Then you can just throw it into a bowl and listen for the munching of happy house guests!