In a large bowl, combine potato gems, milk and vanilla.
Stir in powdered sugar until a dough forms. Chill 1 hour.
Sprinkle additional powdered sugar on wax paper or cutting board.
On dusted surface, roll dough into a rectangle.
Spread peanut butter on top of the dough to cover.
Roll dough into a log shape.
Refrigerate for 1 hour before slicing into pinwheels.
