HEAT morsels and peanut butter in small, heavy-duty saucepan over low heat, stirring constantly, until smooth. Remove from heat. Add sugar; stir vigorously until smooth.
PLACE cereal in large bowl. Add 1 cup melted chocolate mixture; stir until all cereal is coated. Place on ungreased baking sheet. Using small metal spatula, shape into 10-inch circle with slightly raised 1-inch border around the edge. Pour remaining melted chocolate mixture in center of circle; spread to 1 inch from the edge. Refrigerate for 30 minutes or until firm.