Start by measuring the Chex cereal into a large bowl and setting it aside. In a microwave-safe bowl, melt the chocolate chips, peanut butter, and butter in 30-second intervals, stirring each time until smooth. Stir in the vanilla extract and pour over the cereal, tossing gently to coat each piece.
Transfer the chocolate-coated cereal to a large bowl, stockpot, or 2-gallon bag and add 1 ½ cups powdered sugar. Cover and shake or stir until every piece is coated in a snowy layer. Chill in the fridge for about 10 minutes to let it firm up.
While the puppy chow chills, melt the white chocolate wafers and drizzle over the pretzels using a spoon or piping bag. Quickly sprinkle with holiday sprinkles before the chocolate sets. Let them cool for 5 minutes, or refrigerate briefly for a faster set.
Once the puppy chow has firmed, transfer it back to a large bowl or bag and add the remaining ¾ cup powdered sugar. Toss until evenly coated. Finally, mix in M&Ms and mini peanut butter cups, and place the decorated pretzels on top for a festive look. Serve immediately or store for later.