1Measure cereal into large bowl.
2In 1-quart microwavable bowl, microwave chocolate chips and butter uncovered on High 1 minute. Stir; microwave 15 to 30 seconds longer or until mixture can be stirred smooth. Stir in vanilla. Pour over cereal, stirring until evenly coated.
3In 2-gallon large food-storage plastic bag, mix powdered sugar and gelatin. Add cereal mixture. Seal bag and shake until well coated. Spread on waxed paper; cool about 15 minutes. Store in airtight container.