Add chocolate chips, butter, and peanut butter to a microwave-safe bowl and microwave for 1 minute. Stir until smooth. Microwave for an additional 30 seconds if needed.
Stir in vanilla, then pour the mixture onto the Chex cereal. Gently stir until cereal is thoroughly coated.
Alternate pouring layers of powdered sugar and the cereal mixture into a gallon-sized zip-top bag. Seal well and shake.
Once mixture is well coated, spread it out on a parchment-lined baking sheet or waxed paper to cool and set.
Notes
Store muddy buddies in zippered bags at room temperature for up to 2 weeks. Or, store in zippered bags in the freezer for up to 6 months.