Pour all 9 cups of rice Chex into your largest mixing bowl and set it aside. I always use a bowl bigger than I think I need, because stirring in the chocolate coating later gets messy fast. Giving yourself extra room makes the whole process so much less stressful.
In a microwave-safe bowl, combine the chocolate chips, peanut butter, and butter. Microwave in 30-second bursts, stirring each time, until the mixture turns smooth and glossy. I never walk away during this step because chocolate can scorch in seconds if left too long.
Once the chocolate mixture is fully melted, remove it from the microwave and stir in the vanilla extract right away. This little step adds a cozy, bakery-style flavor that makes people ask what your secret ingredient is. I always do this off the heat so the vanilla doesn't lose its aroma.
Pour the warm chocolate mixture over the Chex cereal and gently fold everything together with a rubber spatula. I go slowly here so the cereal squares don't break apart, since nobody wants crumbly puppy chow. Keep folding until every piece looks evenly coated in chocolate.
Transfer the coated cereal into a large zip-top bag, then add the powdered sugar and seal the bag tightly. Shake it vigorously until every piece is dusted in that classic white coating. I sometimes do this in two batches so the sugar sticks more evenly.
Spread the finished puppy chow out on a baking sheet lined with wax paper and let it cool for about 10 minutes. This step keeps the pieces from clumping together once they're fully set. I like to spread mine in a single layer so it cools faster and evenly.