In a large bowl, mix the cereal and powdered sugar.
Melt the peanut butter and butter in a saucepan over medium-low heat, stirring frequently.
Pour the peanut butter over the cereal and combine thoroughly.
Form into one-inch balls and place on a large baking sheet. Refrigerate for 2 hours.
Melt the chocolate in a double boiler over low heat, stirring constantly.
Place the peanut butter balls into the chocolate, a few at a time, turning to coat evenly. Place on a large baking sheet lined with parchment paper. Refrigerate for one hour until the chocolate is hardened.