Pour Chex cereal into a large bowl and set it aside.

In a saucepan, add peanut butter, white chocolate chips, and butter. Cook over medium-low heat, stirring constantly just until the white chocolate chips have melted and the mixture is smooth. Be sure not to overcook the mixture!

Remove from heat and stir in the vanilla extract.

Pour mixture over the Chex cereal and gently stir to coat.

Add half powdered sugar to a gallon size baggie. Add half the cereal mixture to the baggie. Close tightly and shake to coat the cereal with powdered sugar.

Add the rest of the powdered sugar to another baggie, add the rest of the cereal mixture and shake to coat.

Pour the cereal mixture back into the bowl and add the M&M’s. Gently stir to combine.

Store in an air-tight container for up to a week or the mixture can be frozen for up to 2 months.