In a microwave-safe dish melt the peanut butter and unsalted butter. Microwave for 20-second intervals and mix at each interval until both kinds of butters are melted.
Add half of the semi-sweet chocolate chips to the bowl and melt them in the microwave. Microwave for 20-second intervals and mix at each interval until the chocolate is melted into the butter mixture. Add in the rest of the chocolate chips and repeat the steps until everything is completely incorporated.
Add in the vanilla and stir.
Place half of the cereal in a large bowl and pour half of the peanut butter chocolate mixture over the cereal. Gently fold the melted chocolate into the cereal with a large spoon or rubber spatula.
Once fully coated add the coated cereal and half of the confectioner's sugar to a large resealable bag. Seal the bag and shake until the cereal is fully coated. You may have to separate larger chunks by feeling from the outside of the bag. Just separate using your fingers on the outside of the bag. Shake again until all the pieces are coated. Pour these tasty coated cereal pieces into a large serving bowl.
Top this first layer with half of the: pretzels, M&Ms, white chocolate chips, candy canes, M&M's, and sprinkles.
Repeat steps 4 and 5 for the second half of the coated cereal and confectioner's sugar.
Top this final layer with the remaining pretzels, M&Ms, white chocolate chips, candy canes, M&M's, and sprinkles.
Store the mixture at room temperature in an airtight container for up two weeks.
Notes
You can use fewer cups of cereal if you like. Some use 6 cups instead of 11 cups, as they like the thick chocolate coating on the cereal.
You can use a big brown paper bag instead of a reuseable bag.
This can be stored in the fridge or freezer and eaten cold or frozen.
Alternative to semi-sweet chocolate: dark chocolate.
Alternative to creamy peanut butter: sunflower seed butter, as it will set better than natural nut butter. Can also use crunchy peanut butter.
Try this with rice Chex instead.
You can use generic versions of the cereal as well.
Additional fun add-ins: peanut M&Ms, salted peanuts, mini marshmallows, or mini Reese's Pieces.