Set out a large microwave-safe mixing bowl and a large paper grocery bag.
Place the Red Band peppermint sticks in the blender (or food processor) and pulse to break them into a fine powder. You can also do this by placing them in a freezer bag and pounding them with a meat mallet. (I left some of the piece large for the sake of the photos, but they stick to the cereal best when ground very fine.) Pour the peppermint dust into the grocery bag.
Break the almond bark into pieces and place the pieces in the bowl. Microwave in one-minute increments, stirring in between, until the almond bark is fully melted and smooth. This usually take about 3 minutes on high power.
Gently stir the cereal into the melted almond bark, making sure to coat the pieces on all sides. Try not to crush the cereal.
Once the cereal is coated in almond bark, quickly pour the cereal into the grocery bag. Fold the top down a couple of times to seal in the peppermint dust and shake vigorously to coat the cereal.
Open the bag and add 1/2 cup powdered sugar. Fold and shake vigorously again. Check the muddy buddies. If they seem to need more powdered sugar to be fully coated, add another 1/2 cup and shake again.
Pour the peppermint muddy buddies out on wax paper and allow them to dry and firm up. Then move to an airtight container and store at room temperature for up to three weeks.
Quick Tip: Do not mix the peppermint dust and powdered sugar prior to shaking. It's more important for the peppermint dust to stick to the cereal than the sugar. This insures a better peppermint flavor, and in most cases the use of less sugar.