In a medium saucepan, melt together the peanut butter and butter, stirring occasionally until warm and smooth. In a large bowl, stir together the confectioners' sugar and rice cereal; pour the peanut butter mixture over the cereal mixture and use your hands to blend well. Roll tablespoonfuls of the mixture into balls and chill.
In the microwave or in a metal bowl over a pan of simmering water, melt chocolate chips, stirring frequently until smooth. Dip the peanut butter balls into the chocolate using a toothpick. Place onto waxed paper to set.