Combine peanut butter and chocolate chips in a microwave bowl. Heat in microwave on high for 30 seconds, stir, then repeat until it's completed melted.
In a large bowl combine the cereal and nuts. Pour melted peanut butter and chocoalte over the cereal and nuts and stir until cereal and nuts are well coated.
Add the powdered sugar into a large ziplock bag. Pour 1 cup of cereal/nuts mixture into the bag and mix until well coated. Continue adding 1 cup of cereal/nuts at a time until all of the cereal mix is coated.
Keep in a sealed container and enjoy within 3 days.