Put chocolate chips, peanut butter, and margarine in a medium sized microwaveable bowl.
Microwave for about a minute. Stir the mixture, then microwave in 15 second intervals (stirring after each) until melted & creamy.
Add the vanilla and stir until combined.
Pour the cereal into a large bowl.
Pour the chocolate mixture over the cereal. Mix until every cereal piece is covered.
Open up your large plastic zip-lock. Pour in one cup of powdered sugar, then about half of your cereal mixture. On top, add another 1/2 cup of powdered sugar and zip the bag tightly.
Start shaking the bag. I recommend doing this over a sink or garbage can in case of any spills or loose powdered sugar! Shake until all the pieces are evenly covered. You may need more powdered sugar – add to your liking!
Repeat steps six through eight with the second half of your cereal. You can use the same bag if the seal still works!
Serve & ENJOY!