Heat the oven to 350 F and line a 13 x 9 baking pan (or pan/pans that holds 14-15 cups) with parchment paper.
Add the cake mix, milk, oil, and eggs to a large bowl and either mix on medium speed or beat by hand vigorously for 2 minutes. Stir in the rainbow sprinkles, if using.
Pour the batter into the prepared pan and bake for 24-30 minutes, checking at the 25 minute mark with a toothpick inserted into the center. When the toothpick comes out clean, remove from the oven and let cool on a wire rack.
While the cake is baking, make the frosting. Add the butter and cream cheese to a bowl and either whisk on medium speed or by hand, until the butter and cream cheese are light and creamy.
Slowly add in the powdered sugar, mixing on low. Stir in the vanilla.
When the cake is completely cool, either use a round cookie cutter or your dot cake cup of choice to cut out rounds of cake, making sure the cake comes to about 1/3 inch from the top of the container.
Add frosting to the cups and use an offset spatula or back of a butter knife to smooth the frosting so it’s even and flush with the top of the cup. Wipe off any excess cake or frosting off the sides.
Grab a large dish to catch any stray sprinkles and use a spoon to spoon the sprinkles on top, making sure it has complete coverage. Alternatively, you can put the sprinkles in a bowl and dip the tops.
Repeat as needed and enjoy!