01 - Preheat oven to 350°F. Spread shredded coconut evenly on a baking sheet and toast for 5–7 minutes, stirring occasionally, until golden brown. Remove from oven and let cool completely.
02 - In a microwave-safe bowl, combine semi-sweet chocolate chips, creamy peanut butter, and unsalted butter. Microwave in 30-second intervals, stirring between each burst, until fully melted and smooth.
03 - Place Chex cereal in a large mixing bowl. Pour the melted chocolate-peanut butter mixture over the cereal and gently toss until every piece is evenly coated.
04 - In a small microwave-safe bowl, combine unwrapped caramel candies with milk or heavy cream. Microwave in 20-second intervals, stirring between each, until smooth and pourable. Drizzle the caramel over the coated cereal and toss gently to combine.
05 - Sprinkle the toasted coconut over the caramel-coated cereal and fold gently to distribute evenly throughout the mixture.
06 - Transfer the mixture into a large zip-top bag or lidded container. Add powdered sugar, seal tightly, and shake vigorously until every piece is thoroughly coated.
07 - Spread the puppy chow in a single layer on a parchment-lined baking sheet. Allow to cool completely until the coating is set.
08 - If desired, drizzle with melted semi-sweet chocolate and caramel sauce. Let the drizzle set before serving or storing.