Mix together both cereals in large mixing bowl.
In a microwave, melt peanut butter, butter, and chocolate chips in a medium microwave safe bowl for 1 minute on high. Take out and mix, then microwave for another 30 seconds. Once melted, add in vanilla extract.
Slowly spoon out wet ingredients into cereal and mix until coated evenly.
In 2, 1 gallon storage bags, pour an even amount of mix into each bag. Add 1 cup of powdered sugar into each bag and shake until evenly covered.
Spread mixture onto a parchment lined cookie sheet and add Christmas sprinkles and m&m's. Stir until covered. Let cool for 5 minutes.
