In a microwave-safe bowl, combine the chocolate chips, peanut butter, and butter. Microwave in 30-second intervals, stirring between each, until smooth and fully melted. Stir in the vanilla extract.
Place the rice cereal in a large mixing bowl. Pour the melted chocolate mixture over the cereal and gently fold until every piece is evenly coated.
Transfer the coated cereal into a large zip-top bag or a big bowl with a lid. Add the powdered sugar, seal, and shake vigorously until the cereal is completely coated.
Pour the coated cereal into a large serving bowl. Gently stir in the pretzels, M&Ms, marshmallows, and sprinkles. Serve immediately or store in an airtight container.