Line two baking sheets with parchment paper, set aside.
In a large mixing bowl, melt the chocolate and peanut butter in the microwave at 30 second intervals. Mixing at every 30 break. It will take about 90 to 120 seconds total.
Add the cereal to the melted chocolate and peanut butter. Mix to combine. Make sure they are all well until coated.
Next add the powdered sugar to a large ziploc bag. Add the cereal mixture. Shake the cereal mixture and powdered sugar until fully coated.
Spread the muddy buddies onto a lined baking sheet to cool. Sprinkle with holiday m&m's.
Let stand for 30 minutes or longer to cool completely. The chocolate needs to hardened and be completely dried. Store in an air tight container, refrigerated update a week.