Microwave peanut butter and chocolate in large microwaveable bowl on high 1 1/2 minutes; stir until chocolate is completely melted and mixture is well blended.
Add cereal; toss gently to evenly coat. Spread into single layer on waxed paper covered baking sheets; separate cereal pieces. Cool completely.
Transfer cereal mixture to clean brown paper bag or large resealable plastic bag. Add sugar; close bag. Shake gently to evenly coat cereal mixture with sugar. Store in a tightly covered container at room temperature. ENJOY!