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1. Heat oven to 375 degrees F and place rack in center. Grease two baking sheets. In a large mixer bowl beat together butter, peanut butter and sugars on medium speed until light, about 2 minutes. Add egg and extract; beat until combined. Stir in flour, baking soda and salt until a dough forms. Roll into 1-inch balls and place 1 inch apart on prepared sheets.
2. Bake, one sheet at a time, until just set and bottoms are golden, 8 to 10 minutes. For each cookie, immediately place 1 M&M in center for nose, 2 chocolate chips for eyes and 2 pretzel pieces on top for antlers. Transfer cookies on sheets to a wire rack and let cool completely. (Can be made ahead. Store in an airtight container at room temperature, in single layers separated by waxed paper, up to 2 days.)